2018 - 19 ANNUAL REPORT Adoption The 2018-19 Annual Report was adopted at the October 2019 Cook Shire Council Ordinary Meeting in accordance with the Queensland Local Government Act 2009 and Local Government Regulation 2012 S182.
Questions about the plan? If you would like any further information about the Annual Report please contact Council’s Organisational Business Services division via email at [email protected] or phone on 07 4082 0500.
Legislative Requirements The administrative practices of Cook Shire Council are primarily governed by the Queensland Local Government Act 2009 and Local Government Regulation 2012. Under this legislation, Council is required to prepare and adopt an annual report for each financial year, reporting against the Shire’s progress with reference to its community, corporate and operational plans.
Pg 2 - Cook Shire Council 2018-19 Annual Report Contents About Cook Shire 6 Councillors 8 Cook Shire Council 9 Strategic Planning Framework 10 Progress against the Corporate and Operational plans (s190) 11 Key Findings of the 2018-19 Internal Audit 16 Further Legislative Inclusions 16 Administrative Action Complaints 17 Council Registers 17 Community Grants and Sponsorship 18 Concessions 19 Change to Tenders 19 Councillors 20 Community Financial Report 21 Signed Financial Statements 27
Cook Shire Council 2018-19 Annual Report - Pg 3 A word from the Mayor
This last year has been one of significant positive change for Cook Shire.
A reorganised corporate structure and recruitment of key personnel has seen Council attain a staff satisfaction level in the top 10 per cent of similar organisations nationwide. As we move towards Cooktown Expo 2020, we have engaged a skilled and energetic multicultural team to work with our Traditional Owners to make this event a catalyst for Cooktown and the region’s tourism and business development.
We have endured a record wet season and through the Queensland Reconstruction Authority’s Disaster Relief Fund, Council will continue to provide employment to a large workforce of local contractors as we ensure access is restored promptly across our vast Shire. Cook Shire’s relationship with our neighboring councils was strengthened with the formation of the Torres and Cape Indigenous Councils Alliance (TCICA), a collaboration which has already been proven on the ground with projects such as the prompt reopening of the only access road into the tiny Cook Shire community of Portland Roads by Lockhart River Council crew following Cyclone Trevor.
We have successfully delivered a $6.8 million Capital Works program including the finalisation of the Cooktown waterfront reclamation, sports oval works at Lakeland, Coen and Cooktown and roads, footpaths and bridges across the Shire. Council has also undertaken two community improvement programs in Coen and Cooktown, tackling problem areas identified by both residents and Council with a large workforce coming together to deliver the works.
Local government has increasing pressure to deliver a greater range of continuously improving services and take on more liability, but with less money. Council is also proactively working towards solutions at a local level for global issues such as climate change and population growth, with cooperation between the three levels of government and your community support essential to the success of these endeavours.
I would like to publicly acknowledge the job well done by our volunteer community and service organisations, Council staff and contractors over the past year and on behalf of all our team, we wish you all the best for the year ahead.
Cr Peter Scott Mayor, Cook Shire Council Cooktown Discovery Festival
Pg 4 - Cook Shire Council 2018-19 Annual Report From the CEO’s desk
It is a pleasure to report that the close of this financial year saw the successful completion of many initiatives across each of Council’s portfolio responsibilities with a particular focus on developing and strengthening community engagement, governance, statutory compliance, asset management and financial management. Cook’s operational achievements over the past 12 months are notably due to the capacity of our diverse and committed workforce who have over 1,000 years of collective local government experience. Our staff work with contractors and government agencies to deliver services, repair roads and respond to declared weather events, across the largest Shire in Queensland. Council’s engagement with the Shire’s communities has been supported this year by the new Department of Community, Economy and Innovation, an outward-looking team charged with developing social and economic capital across the Shire. The departments of Organisational Business Services and Infrastructure have also welcomed new staff, many of whom are local residents. The challenges in Cook are many, with its small population, vast geographical area and extremely low rate base. In 2018-19 Council’s general rates revenue contributed just 4.3% of Council’s overall annual expenditure. Notwithstanding these constraints, the underlying operating position of Council has improved significantly over the last financial year, with an underlying deficit of $4.3 million, compared with a deficit of $8.1 million in 2017- 18. This is not reflected in the audited financial statements due to two significant adjustments: a one-off recognition of a landfill restoration reserve of $11.6 million and a significant timing difference in receipt of flood damage funding of $8.5 million. A new Audit and Risk Committee has been convened with strengthened strategic and operational risk management tools in place. Through the Works for Queensland program our facilities team has delivered refurbished community buildings in Coen, Rossville, Bloomfield and Portland Roads, among numerous other projects, and Council remains appreciative of the benefits and employment opportunities that this program provides. During the year Council delivered an exceptional and timely program of repair works totalling $32.83 million across the Cape’s 2,945 km road network, funded under the State’s Disaster Recovery Funding Arrangements. In addition, 100 capital works projects and a wide range of operational initiatives were completed. Our workforce goes from strength to strength. The 2019 staff survey conducted independently by a national research consultancy placed Cook Shire in the top 10% of Councils when benchmarked against 65 local governments across Australia. I extend my sincere appreciation to Councillors and staff who successfully secured the tens of millions of dollars in external funding required to support the community and economy of Cook Shire.
Linda Cardew Chief Executive Officer, Cook Shire Council
Cook Shire Council 2018-19 Annual Report - Pg 5 About Cook Shire Cook Shire is a large, sparsely populated shire located in Cape York Peninsula, Australia. Successive Cook Shire Councils have worked creatively and industriously to build a firm foundation for a good quality of life and business opportunity for the population. Cook Shire Council provides infrastructure and a range of municipal and social services. Geography Cook Shire is roughly half the size of Victoria and twice the size of Tasmania: 106,073 square kilometres. The Shire stretches from Palmerville in the south to north of the Jardine River, with over 2945km of roads and encompassing several islands situated off the North East coast of Cape York. Cook Shire adjoins 13 other local government authorities and includes two internationally significant world heritage areas: the Wet Tropics and the Great Barrier Reef, which forms the Shire’s outer boundary. The Shire is subject to extreme seasonality with cyclones and monsoon rains regularly severely affecting infrastructure. Road access to some of the Shire is often restricted for up to five months of the year.
Land Tenure Within the Shire there are just over 2200 rateable properties, raising roughly $7 million in rates and levies per annum. However, rateable properties are gradually declining as properties are transferred to conservation and other non- rateable tenures: Freehold 1 per cent; Land Lease 5 per cent; Aboriginal Shire Lease/Deed of Grant in Trust (DOGIT) or Land Trust 4 per cent; National Park 14 per cent; Nature Reserve 23 per cent; and Mining, State Lands and Reserve 53 per cent.
People The 2018 Estimated Residential Population of the Cook Shire is 4445. Of that, 22 per cent of the population identify as Aboriginal or Torres Strait Islander. According to the 2016 Census, Cook Shire has a similar percentage of children aged 0 to 11 years compared with all of Queensland and a higher percentage of older workers and retirees (50 to 69 years); 31.0 per cent compared to 23.5 per cent for Queensland. Economy The Local Gross Regional Product output in the Shire is a healthy $0.58 billion (National Institute of Economic and Industry Research 2018) providing a strong foundation for long term growth. At the time of the 2016 Census, mining was the largest industry of employment for all workers within Cook Shire followed by accommodation and food services, education and training, and public administration and safety. Cooktown, Marton and Endeavour Valley On the banks of the Endeavour River, Cooktown (and its surrounding communities) is the Shire’s major township, service and population centre. European settlement began with Captain Cook, followed by explorers and miners, and the establishment of pastoral and timber industries. Today Cooktown is home to a range of industries which include retail, hospitality services, construction, trades, tourism and government. The population values the laid-back lifestyle, the acceptance of all peoples, and the town’s natural beauty, whilst desiring ongoing sustainable development across multiple industries. Traditional Owners refer to the area as Waymburr: a traditionally peaceful meeting place.
Pg 6 - Cook Shire Council 2018-19 Annual Report Coen An important supply point for travellers heading to the Cape, Coen provides key services to the North. Cape York Heritage House Museum attracts tourists travelling to and from the tip of Cape York. Tourism in Coen is confined to the dry season and access can be difficult during the wet season. The town is home to a population featuring many different Indigenous and non-Indigenous families and community groups. Tourism, pastoral and mining industries are key to Coen’s growth. Bloomfield Hosting a smaller population, the Bloomfield Valley (including the township of Ayton) is encompassed by a beautiful environment which the locals are passionate about. Offering rivers, beaches, Wet Tropics and Cedar Bay National Park, the population is happy with their community and strives for less regulation, the chance to contribute to decision-making for the area, and the development of its arts and cultural facilities. Lakeland Lakeland is a small farming community: tight knit, prosperous and keen for further development despite an accommodation shortage. A pleasant place to live, the fertile, scenic, volcanic-formed basin supports extensive farming. Lakeland is home to some of the largest banana producers in Australia, and will also soon house two of the country’s largest solar plus battery storage projects and the state’s most northern avocado crop.
Fruit Bat Falls
Rossville Region Encompassing Helenvale, Shiptons Flat, Mount Amos and Archer Point, the Rossville region emerged through mining and pastoral industries in the 1800s. Forming part of the Bloomfield Track, the village in the rainforest atmosphere attracts tourists and naturalists alike, with residents proud of the environmental diversity and community lifestyle. Port Stewart 54km from Coen, two settlements can be found at Port Stewart, Moojeeba and Theethinji. Known as Yintjingga (sea eagle) in the local language, Port Stewart offers public camping grounds, a boat ramp and associated tourism services. Portland Roads Portland Roads is a beautiful, small community neighbouring Chilli Beach and protected from the South Easterly trade winds. Whilst managing the tourist trade is important, the population exhibit concern about whether the town’s infrastructure can keep up with the increasing number of seasonal visitors heading North. Laura Established in 1887, Laura’s population is largely indigenous, and the traditional owners are recognised by a series of Land Trusts for reserves in and around the township. Proud of the scenery and indigenous connections, the population sees tourism as a prime growth industry and the world famous Aboriginal rock art in the area supports this vision.
Cook Shire Council 2018-19 Annual Report - Pg 7 Councillors
Cook Shire Council is made up of seven Councillors. Every four years residents democratically elect a Mayor and six Councillors as community representatives. The latest Local Government election was held on March 19, 2016 by full postal ballot. Your Councillors were popularly elected to represent the diverse views and social ecology of our Shire. We are fortunate to have a sound mix of gender and experience with the key team traits of common sense and community focus. Councillors are allocated portfolios comprising regions and sectors that align to their strengths and interest.
Mayor Peter Scott years managing an accommodation for many years with various local business in Cooktown. Cr Scott groups including golf, rugby league, Cr Scott has a strong business is also an advocate of many tennis and parents and citizens background, with more than 23 years community groups and passionate groups. Elected Councillor in 2004, working for Westpac and a further 23 about sport, having volunteered Mayor in 2008, 2012 and 2016.
Deputy Mayor Robyn Holmes Cr Alan Wilson Cr Kaz Price Cr Holmes has lived in rural areas Cr Wilson has lived on Cape York Cr Price was raised on a cattle all her life and has a background in for more than 25 years working in property and has lived in Cooktown State Government administration, the cattle industry and as a business since 2003. She has been manager banking, management and the rural owner. Cr Wilson is the Council of the Cooktown District Community sector. She has lived in Cooktown representative for the Laura/ Centre since 2013. since 2006. Lakeland area. Elected Councillor Elected Councillor in 2012 and 2016. Elected Councillor in 2016. in 2004, 2008, 2012 and 2016.
Cr Larissa Hale Cr John Dessmann Cr John Chook Giese Cr Hale is a traditional owner Cr Dessmann moved to Cooktown Cr Giese has lived in Cooktown since of the Archer Point region and from Melbourne 14 years ago and 1973, and is the representative for is passionate about land and has owned several businesses, with a Coen and surrounds. Cr Giese was sea management and caring for background in tourism and business. a Council employee for seven years, country. Cr Hale is the Regional Cr Dessmann is the representative specialising in road construction and Arts Development Fund Advisory for Rossville and Bloomfield. Elected maintenance. Elected Councillor in Committee Chair. Councillor in 2016. 2016. Elected Councillor in 2016.
Pg 8 - Cook Shire Council 2018-19 Annual Report Cook Shire Council
Successive Councils and the community have worked creatively and hard to build a firm foundation for a good quality of life and successful business opportunity in Cook Shire. Today, Cook Shire Council’s place in the community is to maintain and improve that foundation through the provisions of infrastructure and a range of municipal and social services.
Our Vision
Building sustainable communities with respect for our unique natural environment, celebrating our diverse “ cultures and sharing our pride in Cape York.
Our Mission
Our mission is to understand our communities’ needs and provide consistent service to enable them to flourish in a safe, sustainable manner.
Our Core Values and Principles
Cook Shire Council promotes, encourages, rewards and actively believes in:
• Providing a safe workplace; • Adopting honest and progressing systems of accountability and reporting; • Working with our communities and stakeholders to plan, define, achieve and celebrate common short and long term goals; • Actively sharing responsibility for improving sustainable service provision for all customers; • Ensuring equal opportunity for all employees, potential employees, employees pursuing promotion and cross skilling and persons and organisations seeking to work with Council through the provision of services, works and consultancy; and • Encouraging and rewarding innovation demonstrated in operational and strategic service provision. ”
Cook Shire Council 2018-19 Annual Report - Pg 9 Strategic Planning Framework The 2018-19 Annual Report is a way for Council to report to the community on its financial and operational progress against Council’s 2017-2022 Corporate Plan. The Corporate Plan is designed to translate the needs and expectations of the community into tangible action and strategy. The plan provides for the prioritisation of Council’s work commitments within a strategic framework. Those works are identified every year in Council’s Operational Plan. The yearly budget is then developed based on the Operational Plan. At the end of each year the Annual Report is compiled to outline Council’s achievements against the Corporate and Operational Plans by reflecting on its performance over the past 12 months.
Identify community need
Cook Shire Community Plan 2011-21 Shire vision, aspirations and priorities
Develop a strategic response
Long term Strategic and Financial Plans Provide tangible strategic pathways to achieve community priorities State and Federal Government requirements Ensure Shire growth complies with legislation and regional planning framework Five Year Corporate Plan Detail community priorities, outcomes and strategies
Determine and implement operational priorities
Annual Operational Plans and Budgets Guide departmental deliverables and resourcing
Inform the community of ongoing performance
Quarterly performance assessments Assesses progress of the Operational Plan
Annual Report Reviews performance for the year
Pg 10 - Cook Shire Council 2018-19 Annual Report Progress against the Corporate and Operational plans (s190) Cook Shire Council’s Operational Plan gives effect to the Corporate Plan on an annual basis. Council provides A Regional Arts Officer has been appointed, funded through a detailed quarterly assessment of the progress made Arts Queensland to deliver the Regional Arts Services against its Operational Plan. Details of the quarterly review Network (RASN) initiative, delivering on the ground arts of the Operational Plan can be found on Council’s website. services across Cape York and the Torres Strait. Council The following gives a broad overview of Council’s works facilitates social housing for aged residents of Cooktown against the 2017-22 Corporate Plan to June 30, 2019 and and this year also commenced a staff housing initiative to the 2018-19 Operational Plan. enable retention and attraction of key workforce positions. A review is underway to provide innovative and viable Community options for implementing library services in more Cook Shire communities. New coding and robotics initiatives Council has exceeded the Connected Communities have been well received at the Cooktown Library, as well initiatives outlined in its 2018-19 Operational Plan. Delivery as early literacy programs and provision of electronic of these objectives has been made possible through resources available for use by the public. successful grant funding, partnerships and strategic prioritising of resources. A range of community events were facilitated and supported by Council, including the annual Cooktown An Indigenous (Bama) Partnerships Officer has Discovery Festival, Australia Day Awards and 100 years been appointed to actively engage and create strong of Council commemorations, and the official opening and partnerships with residents, businesses and community naming of the Cooktown waterfront development, William groups across Cook Shire and Cape York communities. Daku Park. The inaugural Sunset with Santa event saw Council is moving towards meaningful advancement over 200 children and their family members enjoy a balmy for its Indigenous employees through the adoption of a evening of Christmas fun on the new waterfront. Reconciliation Action Plan, currently in a planning and engagement phase. Sports and recreation facilities have been improved across the Shire through Council works programs, funded Community and economic development funding rounds projects and in-kind support and partnerships with local have been streamlined in one Community Grants and organisations. Some key developments include the new Support Program to support local projects that will enhance Lakeland Recreation Park, Bloomfield Hall gym, John the social and economic wellbeing of communities. Arts Street Oval irrigation and lighting upgrades, Cooktown Queensland continues to partner with Cook Shire to Skate Park fixed shade cover, and bike racks and shade support quality arts and cultural experiences through the trees at William Daku Park, and Coen Sports Field lighting, Regional Arts Development Fund (RADF). Council’s Event irrigation and facility upgrades. Council has improved its Development Program came to a close this year, with community engagement throughout the Shire with public all grant recipients showing strengthened capacity and consultation days and increased media output via print resilience to continue to deliver key major events around and digital outlets. the Shire.
Coen Community Blitz
Cook Shire Council 2018-19 Annual Report - Pg 11 Caption: xxxxxx
Poison Creek Road culvert replacement
Economy The Cooktown Airport Development continues with plans Over the 2018-19 financial year, Council has made to create additional airside blocks of land, realign roads substantial progress in addressing key economic and create a carpark with support through the Building development priorities highlighted in current Corporate Better Regions Fund. Daintree Air officially opened the and Operational plans and continues to be proactive in company’s hangar in February 2019. Council is also generating and leveraging opportunities for sustainable planning to strengthen and upgrade the Cooktown Airport economic growth wherever possible. runway surface to Code 3C to enable use by larger aircraft.
Council is working closely with James Cook University, Key Council-owned community facilities continue to be run the Commonwealth Scientific and Industrial Research under management agreements, including operation of Organisation (CSIRO), the Department of Environment the Barrier Reef Childcare Centre recently awarded under and Science, and other collaborators on the Clean Growth a 12-month contract to Lady Gowrie Queensland. Council Choices program, which aims to support regional and has a continued partnership with Education Queensland rural communities to successfully navigate towards more for the management of the Cooktown Pool and support in a resilient futures in the face of various and disruptive global major facility refurbishment. PCYC Queensland continues and local pressures. to operate its local branch from the Cooktown Events Centre and works closely with Council to support local not- Cooktown Expo 2020 is less than a year away. Council for-profit groups’ use of the venue and maintain the facility expects significant economic, social and cultural benefits to as the place of refuge for Cooktown and surrounds. Cook Shire and the wider region both in the lead up to and post events. The ultimate aim is to create lasting positive Attendance at major trade shows and tourism events across impacts for communities through a range of legacy projects Queensland is vital to keeping the Cape York region in the and initiatives. A Project Director, Operations Coordinator spotlight among tourism operators and travellers. Cook and Indigenous Projects Officer have all been employed Shire maintains membership with the Cooktown Chamber specifically to lead this major event and significant funding of Commerce and Tourism, as well as Tourism Tropical has so far been secured through the State Government North Queensland. These agencies provide a range of and National Museum of Australia, with a major funding networking and promotional opportunities to support commitment from the Federal Government. business growth across the region. Council produces and distributes a series of tourism trails brochures and town Measuring visitor numbers and demographics has provided maps, and also invests in a long-term advertising billboard key insight into the economic impact and opportunities facing northbound traffic at the Cairns Airport turnoff on the of major events. The 2019 Cooktown Discovery Festival Captain Cook Highway. saw 4,027 attendees over the three day event – a 12.7% increase on the previous year. Tourism and Events Queensland funding was key to ensuring successful Environment delivery of this annual event, traditionally marking the start Cook Shire has had continuing successful outcomes with of the tourist season. animal management in Cook Shire for 2018-19, entering
Pg 12 - Cook Shire Council 2018-19 Annual Report the second year of the Healthy Dog – Healthy Communities Plan for most of the Shire’s assets have been completed program, thanks to ongoing support and funding by the to assist with Council’s longer term financial forecasts and Department of Health and contributions by Council in a financial planning. Asset management within the Shire will continuing partnership with local veterinarians and the be developed to maturity over the next three to five years. Coen and Laura communities.
Cook Shire’s commitment towards combating weeds and Infrastructure education and training was reinforced with a biosecurity The Infrastructure Services division of Council is induction conducted for all road plant operators working responsible for managing the Shire’s vast roads network, on Council roads prior to commencement of works in June 2019. The establishment of a weed garden in the Botanical as well as stormwater drainage, parks and gardens, town Gardens for educational purposes is in its infancy with water and sewerage and waste management. two species planted (rubber vine and sicklepod) under a Restricted Matter Permit obtained for this purpose. The 2018-19 Capital Works Program was an ambitious This will help with public awareness of particular weeds program with many projects. Some of the highlights of the and their identification. Council’s Biosecurity Services program are mentioned here. During 2018, works were team also presented at the AgForce Field Day updating completed at the waterfront including road works, footpaths, landholders on current priorities and works programs as installation of personalised pavers and irrigation to ensure well as the importance of communication with Council, the area was ready for the official opening and naming the community and othe landholders regarding natural ceremony of William Daku Park in November 2018. resource management issues. The second stage of footpath installations in Laura was Waste completed, linking with the footpath previously installed The Waste Reduction and Recycling Plan was released for by the Australian Defence Force. A new composite bridge public consultation in July 2018 and adopted by Council in replaced the damaged wooden bridge at Marrett River October 2018. The new waste strategy, the Cook Shire giving tourists safe access to Bathurst Bay and Wakooka Council Waste Reduction and Recycling Plan 2018- Road. The beginning of 2019 saw the replacement of 2028 (WRRP) has now been formulated into a 10 year concrete pipes and a new concrete floodway at No Name action plan.The old Ayton and Rossville landfills are in the Creek on Poison Creek Road. process of receiving site rehabilitation in accordance with their closure/post closure plans. With strong community support and thanks to the Works for Queensland program, the grounds at the Lakeland Recreation Park were laser levelled and top dressed, and Asset Management a bore, goal posts and irrigation were installed. Maytown In March 2019 Council adopted the Asset Management Road was also a Works for Queensland project that was Policy. The policy sets guidelines for implementing finalised in June. Working alongside Traditional Owners consistent Asset Management processes throughout and the Queensland Parks and Wildlife Service, civil works the Shire to ensure that adequate provision is made for contractors completed a maintenance grade on 6km of sustainable long-term management of assets. the road. Further roadworks included reseals and major The Asset Management Strategy and Asset Management patching of 15 urban roads in Cooktown and Coen.
Cooktown Pool inflatable obstacle course
Cook Shire Council 2018-19 Annual Report - Pg 13 Governance which supports improved security, reliability, performance and management of Council’s core and outlying systems. Cook Shire Council’s Corporate Plan outlines governance as one of its four Key Strategic Priorities. The strategies Increased organisation-wide training in both records and objectives as identified in the Corporate Plan are administration and Council’s document management implemented on an annual basis through Council’s system has substantially improved records management. Operational Plan. Council’s governance function Council reviewed all business registers throughout the substantially met its strategic and operational objectives year and full compliance was demonstrated. throughout the 2018-19 financial year. Council’s Customer Service Charter was developed and To further support Council’s financial sustainability, our a review of Council’s Customer Request Management rating structure was revised and adopted by Council, Process was undertaken. In order to increase oversight and implemented for the 2019-20 financial year as a and governance throughout Council, the Audit and Risk key component of the budget. Council has implemented committees were amalgamated, meeting as required management strategies to underpin asset sustainability. under the adopted Audit and Risk Committee Charter. Council’s Asset Management Strategy was adopted in June 2019. To ensure legislative compliance related to Work Health and Safety management has delivered housing and leasing arrangements, Council maintained a excellent outcomes for the year. Measures including positive rental ledger throughout the year. increased staff communication, the development of a new Safety Management System, a renewed Safety Committee A clear communication plan was implemented to provide and the Safety Steering Committee in place will continue the community, elected members and Council staff with a to pave the way toward a safer work environment. greater understanding of decision making processes and legislative requirements. The organisational review was completed during the year, the workforce stabilised and resources allocated. Throughout the 2018-19 financial year Council’s work Council’s Enterprise Bargaining Agreement was adopted management systems were reviewed and adjusted with overwhelming support, with 100% of votes received in to support improved organisational service provision, support of the Indoor and Outdoor agreements. compliance and efficiency. A review of Council’s security, monitoring and communications systems and available technologies was completed. As a result new communication technology was implemented,
Flood damage, Strathmay to Harkness Road
Pg 14 - Cook Shire Council 2018-19 Annual Report Cook Shire Council 2018-19 Annual Report - Pg 15 Key Findings of the 2018-19 Internal Audit Two internal audits were conducted in the last financial year, both conducted by an independent auditor, Crowe Horwath. One audit was focused on contractor management, while the second was focused on payroll.
Contractor Management Audit The contractor management internal audit scope period was 1 July 2018 to 3 May 2019 and the report contained five findings, including process improvement opportunities. Management agreed with all findings and an action plan is in place to address any shortfalls. The summary of findings included: • Lack of a formalised contract management framework that is able to be consistently applied; • Issuing shift contracts as opposed to overarching whole of project contracts, which led to the disclosure on Council’s website not disclosing the full value of contracts awarded, but only the quantum of each shift contract; and, • An inconsistent approach to contract management. Four findings were rated moderate, with one process an improvement opportunity.
Payroll Audit Summary of findings: • The payroll internal audit scope period was 1 July 2018 to 3 May 2019 and the report contained 23 findings, including four process improvement opportunities. Management agreed with all findings and an action plan is in place to address any shortfalls. • None of the matters identified constituted a high risk finding, 12 were rated moderate, and the remainder were low risk or improvement opportunities.
Further Legislative Inclusions As required by the Queensland Local Government Act 2009 and Division 3 of the Local Government Regulations 2012 (the Act and the Regulations), the annual report for a local government must contain information relating to specific legislative and operational procedure, actions and resolutions (where relevant). Where information is required under the Act or Regulation that does not pertain to Cook Shire Council, it has been excluded.
185 Particular resolutions (a) a list of any resolutions made during the financial year under section 206(2) (Requirement to adopt expenses reimbursement policy or amendment).
22 May 2019 Council Meeting 14.8 COUNCILLOR REMUNERATION AND EXPENSES REIMBURSEMENT POLICY 22 MAY 2019 ORDINARY COUNCIL MEETING RESOLUTION 2019/96 Moved: Cr Kaz Price Seconded: Cr Larissa Hale It is recommended that Council adopts the revised Councillor Remuneration and Expenses Reimbursement Policy dated 22 May 2019. CARRIED
Pg 16 - Cook Shire Council 2017-18 Annual Report Administrative Action Complaints Cook Shire Council undertakes the management of all complaints or referrals in accordance with the General Complaints Process as detailed under the Queensland Local Government Act 2009. Council acknowledges the right of persons to provide feedback, both positive and negative, on its services and/or to lodge a complaint about a decision or other action it takes. Council actions complaints in accordance with its General Complaints Policy and Procedures, adopted July 2013.
This Policy has been instituted to ensure that, to the greatest practical extent, any complaint is dealt with fairly, promptly, professionally, in confidence (subject to any legal requirements) and in a manner respectful to the complainant. Council has committed to providing adequate resources and trained officers to deal with complaints and to record and analyse complaints data and has successfully evidenced impartial assessment, investigation and resolution of complaints in the past financial year.
During the 2018-19 financial year Council received nine complaints that were assessed as being a result of a Council administrative action. All nine complaints were investigated. Four complaints were not resolved under Council’s administrative action complaints process and are currently working towards resolution. Of the outstanding complaints, one resolution was delayed due to the extended wet season. One complaint was referred to the Queensland Courts, summary jurisdiction and was resolved by the Court. By comparison, in the 2017-18 financial year nine complaints were assessed under Council’s administrative action complaints process.
Warrma, Cooktown Discovery Festival
Remuneration Council has four full time executives. During the financial year two temporary executives were placed in an interim capacity until the organisational restructure was complete. The total of all remuneration packages paid in the 2018-19 financial year to executives was $939,755. No executive was paid within the total package salary band comprising $0 to $100,000, five executives received salary packages that totalled between $100,000 and $200,000 and one received a salary package totalling between $200,000 and $300,000. Council Registers • Delegations Register • Risk Register • Contaminated Land Register • Local Law Register • Roads Register • Cemetery Register • Community Grants Register • Register of Fees and Charges • Register of Interests • Register of Benefits and Gifts • Lobbyist Register • Register of Electoral Gifts • Asset Register • Register of Contracts Valued a more than $200,000
Cook Shire Council 2017-18 Annual Report - Pg 17 Community Grants and Sponsorship 2018-19 Community Small Grants Program
Recipient Amount Purpose Bloomfield District Residents Association $5,000.00 Bloomfield Community Gym Cooktown District Community Centre $4,500.00 Foreshore fitness for seniors Yuku Baja Muliku Landowner $5,370.00 YBM Junior Rangers Catering and Reserves Ltd Total $14,870.00
2018-19 Community Grants Program
Recipient Amount Purpose Cooktown Underwater Hockey Group $4,000.00 Underwater hockey skills session Gungarde Community Centre $3,000.00 Culture and Capability Program Aboriginal Corporation Women’s Group Lakeland State School P&C Association $4,358.00 To all the continuation of an after- school sports program to be run over three terms by a qualified coach North Queensland Mushroom Club $4,754.00 Oyster mushroom cultivation workshops (Cooktown Food Connect Inc) Rossville and District Citizens $3,622.00 Installation of a picnic bench and concrete Association Inc slab at the Rossville marketplace Sporting Shooters Association $1,888.00 Equipment and skills needed to of Australia, Cooktown conduct Firearms Safety Course Wunthulpu Aboriginal Land Trust $5,000.00 Purchase of new equipment for the Coen Cinema Experience Total $26,622.00
2018-19 Community Sponsorship and In Kind Support Program
Recipient Amount Purpose Cape York Folk Club $2,855.00 Hire of water truck, recycling skip bins and plastic chairs for the 2018 Wallaby Creek Festival Cooktown Amateur Turf Club $4,967.00 Hire of water truck and dumping fees for the 2018 Annual Cooktown Races Cooktown Community Church Ltd $1,000.00 Purchase electronic glow candles and lollies to giveaway and cover costs of a free sausage sizzle Cooktown Horse Sports Association $1,000.00 Purchase ribbons and trophies for the 2018 Horsesports and Bulls, Barrels and Broncs event Far North Queensland Hospital Foundation $3,000.00 Hall hire and rubbish bin removal for 2018 Cairns to Cooktown Cardiac Challenge Endeavour Lions Club $180.00 Purchase of six wheelie bins from Council for the collection of recyclable bottles from outlets in Cooktown Scripture Union $4,295.00 Hire of ute, water pod and trailer Laura and District Rodeo and $4,680.00 Temporary entertainment event application Campdraft Association fee and General mixed waste disposal
Pg 18 - Cook Shire Council 2018-19 Annual Report South Cape York Catchments Group $1,175.00 Water Coolers (x3), marquees (x3), chairs (x10), Skip bin delivery and pick-up QRAM Black Star Radio $1,000.00 Accommodation and travel for the PCYC NAIDOC day event Lakeland Horse Sports $3,560.00 Dumping fees Cooktown RSL Sub Branch $750.00 Two staff to work on the ANZAC Day public holiday to put out chairs for dawn and morning service, plus vehicle hire as needed Total $27,742.00
2018-19 Regional Arts Development Fund (RADF) Program
Recipient Amount Purpose Carol Fossett, auspiced by Jane Dennis $3,638.00 Sing Up Cooktown Creative Arts Association $5,440.00 Kilns for Cooktown Cooktown Re-enactment Association Inc $8,865.00 Language/Cultural Heritage Preservation Cooktown School of Art Society $1,350.00 Mosaic Workshops Ella Hartwig $3,000.00 Recording and release of debut EP Vera Scarth-Johnson Gallery Association $5,000.00 Banks Florilegium Yuku Baja-Muliku Land Trust $5,650.00 Shibori dyeing and plant and Reservation Ltd card making workshop Total $32,943.00
Concessions Concessions granted by Cook Shire Council for rates and charges in the 2018-19 Financial Year and in accordance with section 190(1)(g) of the Queensland Local Government Regulation 2012 are as follows:
State Government Pensioner Subsidy 243 $46,215.39 Council Pension rebate 238 $46,066.53 Concession on water consumption charges for dialysis 1 $103.25 Concession on water consumption charges for leaks 7 $10,970.09 Concession on sewerage charges 1 $700.00 Concession on rates and charges 2 $410.00 Change in water service charge (25mm to 20mm) 13 $3,328.00 50% reduction on 20mm residential water service 11 $4,411.75 and 50% reduction on water consumption Change in water service charge (32mm to 25mm) 4 $1,848.00 100% general rates concession - annually 2 $4,384.69 100% sewerage charges concession - annually 2 $984.00 100% water access charge - annually 1 $718.00 100% vacant water service at no charge - annually 3 $720.00 100% environmental levy concession - annually 2 $704.52 Properties resolved at non-valued 5
Change to Tenders There were no changes to tenders issued during the 2018-19 financial year [section 228 (7) of the Local Government Regulation 2012].
Cook Shire Council 2018-19 Annual Report - Pg 19 Councillors The following table details the total remuneration, including superannuation contributions, paid to each councillor during the financial year. No action was undertaken in accordance with sections 180, 181 and 176 of the Act (conduct and performance of Councillors) during the 2018-19 financial year.
Councillors Remuneration
Councillors Gross Salary 12% Superannuation Expenses Peter Scott $103,807.16 $12,456.86 $13,414.42 Robyn Holmes $59,595.80 $7,151.50 $1,355.23 Alan Wilson $51,911.05 $6, 229.33 $21,618.31 Kaz Price $51,768.69 $6,212.24 $0.00 Larissa Hale $51,768.69 $6,212.24 $0.00 John Dessmann $51,652.26 $6,198.27 $447.00 John Giese $51,652.26 $6,198.27 $2,596.04 TOTAL $422,155.91 $50,658.71 $39,431.68
Ordinary Council Meetings Attended
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Councillors 2018 2018 2018 2018 2018 2018 2019 2019 2019 2019 2019 2019 Peter Scott • • • • • • • • •
Robyn Holmes • • • • • • • • •
Alan Wilson • • • • • • • • • • •
Kaz Price • • • • • • • • • •
Larissa Hale • • • • • • • • • • • •
John Dessmann • • • • • • • • • • • •
John Giese • • • • • • • • • • •
Other Council Meetings Attended
Jun Mar Jun Jul Aug Sep Mar Sep Apr Aug Sep Nov Jan Councillors 2019 2019 2019 2018 2018 2018 2019 2018 2019 2018 2018 2018 2019 Spec Risk Risk P&E P&E P&E P&E RADF RADF PCYC PCYC PCYC PCYC Peter Scott • • • • • • • • •
Robyn Holmes • • • • • • • • • • •
Alan Wilson • • • • • •
Kaz Price • • • • •
Larissa Hale • • • • • •
John Dessmann • • • • • • • •
John Giese • • • • •
Pg 20 - Cook Shire Council 2018-19 Annual Report Community Financial Report The table below shows some key result areas with two prior years’ comparatives. The main difference to note is the recognition of a landfill provision and the reclassification of flood damage income and expenditure from capitalto operating.
Financial Summary
2018-19 2017-18 2016-17 $000 $000 $000 Operating Revenue 48,646 24,274 23,429 Operating Expenses 73,184 32.416 29,904 Operating Position (24,538)* (8,142) (6,475) Capital Income 4,857 36,213 34,151 Capital Expenses 68 16,895 25,103 Net Result (19,749) 11,176 2,573 Total Assets 312,995 320,309 315,910 Total Liabilites 26,080 13,645 13,791 Net Community Assets 286,915 306,664 302,119 * The operating position of Council has deteriorated compared with the deficit of $8.1million in 2017-18, due to a one off transaction to recognise a landfill provision of $11.6 million and the transfer of disaster recovery expenditure and revenue to operating income and expenditure.
Taking into account these two transactions, and removing them from the equation, Council’s actual position is as follows:
$000 Net Operating Position (24,538) Add back: landfill provision 11,654 Deduct: flood damage (revenue) (24,332) Add back: flood damage (expenditure) 32,834 Actual underlying position (4,382)
Sunset, William Daku Park waterpark
Cook Shire Council 2018-19 Annual Report - Pg 21 Measures of Financial Sustainability The Local Government Regulation 2012 requires Council to report its results for the financial year against selected financial sustainability ratios. These are stated below:
Ratio How the ratio is calculated Ratio Target Operating Surplus Ratio Net result (excluding capital items) divided by total -50.44% 0-10% operating revenue (excluding capital items) Asset Sustainability Ratio Capital expenditure on the replacement of 38.74% >90% infrastructure assets (renewals) divided by depreciation expense of infrastructure assets Net Financial Total liabilities less current assets, divided by total 8.49% <60% Liabilities Ratio operating revenue (excluding capital items)
The operating surplus ratio is an indicator of the extent to which revenues raised cover operational expenses. Council has reported an operating deficit of $24.5 million resulting in an operating surplus ratio shown as negative 50.44%. The asset sustainability ratio is an approximation of the extent to which infrastructure assets are being replaced as they reach the end of their useful lives. Council has not achieved this target in the financial year. The ratio has decreased from 224.56% in 2017-18. In the previous year flood damaged expenditure of $16.8 million was included in the calculation of this ratio. In 2018-19 expenditure on non flood damaged assets was $4.55 million compared to $6.3 million in 2017-18. The net financial liabilities ratio is an indicator of the extent to which the net financial liabilities can be serviced by operating revenue. As Council’s borrowings are not excessive the 8.49% is well below the target of less than 60%. Income: Where did the money come from? Council received $53.503 million in revenue. The largest contribution was from operating and capital grants, subsidies and contributions, totalling $40.8 million. Total income decreased by $6.984 million from the previous year. Some of the principal movements included: • Rates, levies and charges decreased by $165,000. • Sales revenue decreased by $925,000, due to a reduction in contract and recoverable works. • Operating grants, subsidies and contributions increased by $25.439 million, mainly due to the reallocation of disaster recovery funding from capital grants to operating grants. This also resulted in capital grants subsidies and contributions decreasing by $31.121 million. The difference of approximately $6 million relates to a prepayment of funding in the 2017-18 financial year.
Pg 22 - Cook Shire Council 2018-19 Annual Report Cooktown Cemetery Blitz
Expenses: Where was the money spent? Council spent more than $73.252 million during the year between operations ($73.184 million) and capital expenses ($68,000). A further $6.8 million was expended on capital works. Total recurrent expenses increased by $40.768 million. Some of the movements are explained below: • Employee benefits increased by $1.288 million. • Materials and services increased by $39.118 million. This increase related to the change in treatment for flood damage expenditure, now treated as repairs and maintenance rather than capital expenditure. A further contribution was the recognition of a landfill provision of approximately $11.6 million; and • Depreciation increased by $333,000.
Cook Shire Council 2018-19 Annual Report - Pg 23 Capital Expenditure During the year Council completed $6.8 million in capital works, which was broken down as follows.
$000 Land 0 Buildings and Facilities 1,748 Plant and Equipment 984 Furniture and Equipment 69 Roads, Drainage and Bridge Network 1,452 Water 897 Sewerage 1,533 Other Structures 166 Total 6,849
This does not include flood damage repairs which totalled $32.8 million. The graph below shows the expenditure across different categories of assets.
Cooktown Botanic Gardens tour
Pg 24 - Cook Shire Council 2018-19 Annual Report Lakeland Recreation Park
Assets: What do we own? At 30 June 2019 Council assets were valued at $313 million. Of this, $291.047 million related to property, plant and equipment. The graph below shows the different asset classes.
Cook Shire Council 2018-19 Annual Report - Pg 25 Liabilities: What do we owe? At 30 June 2019, Council’s liabilities totalled $26.080 million. This represents a significant increase from $13.645 million in 2017-18 and relates to the recognition of a liability of $11.6 million for the landfill restoration provision. Although the provision has been identified in the 2018-19 financial year, this liability has existed from the creation of the landfill sites. Therefore this recognition has improved the accuracy in the reporting of Council’s actual position.
Liabilities 2018-19 2017-18 2016-17 2015-16 $000 $000 $000 $000 Current Liabilities, Current 6,416 4,504 4,647 10,092 Trade & Other Payables Current Borrowings 460 435 388 368 Current Provisions 986 892 996 893 Current Other Liabilities 0 972 1,392 0 Total Liabilities 7,862 6,803 7,423 11,353 Non-Current Liabilities, Non 4,208 4,657 4,405 4,794 Current Borrowings Non Current Provisions 13,762 1,943 1,798 1,835 Non Current Other Liabilities 248 242 165 153 Total Non-Current Liabilities 18,218 6,842 6,368 6,782 Total Liabilities 26,080 13,645 13,791 18,135
Pg 26 - Cook Shire Council 2018-19 Annual Report Cook Shire Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2019
Place Council's Vision or Mission Statement here…… Cook Shire Council
General Purpose Financial Statements for the year ended 30 June 2019
Table of Contents Page
1. Primary Financial Statements: Statement of Comprehensive Income 2 Statement of Financial Position 3 Statement of Changes in Equity 4 Statement of Cash Flows 5 2. Notes to the Financial Statements Note Details Page 1 Summary of Significant Accounting Policies 6 2(a) Council Functions - Component Descriptions 9 2(b) Council Functions - Analysis of Results by Function 10 3 Revenue Analysis 11 4 Grants, Subsidies and Contributions 1 5 Capital Income 14 6 Employee Benefits 14 7 Materials and Services 15 8 Finance Costs 15 9 Capital Expenses 15 10 Cash and Cash Equivalents 16 11 Trade and Other Receivables 17 12 Property, Plant and Equipment 19 13 Trade and Other Payables 28 14 Borrowings 29 15 Provisions 30 16 Asset Revaluation Surplus 32 17 Retained Surplus 33 18 Commitments for Expenditure 33 19 Contingent Liabilities 34 20 Superannuation 34 Reconciliation of Net Result for the year 21 36 to Net Cash Inflow (Outflow) from Operating Activities 22 Financial Instruments 37 23 National Competition Policy 40 24 Transactions with Related Parties 41 25 Reserves 43 3. Management Certificate 44 4. Independent Auditor's Report 45 5. Current Year Financial Sustainability Statement 47 Certificate of Accuracy - Current Year Financial Sustainability Statement 48 Independent Auditor's Report - Current Year Financial Sustainability Statement 49 6. Unaudited Long Term Financial Sustainability Statement 51 Certificate of Accuracy - Unaudited Long Term Financial Sustainability Statement 52
page 1 Cook Shire Council
Statement of Comprehensive Income for the year ended 30 June 2019
2019 2018 Notes $'000 $'000
Income Revenue Recurrent Revenue Rates, Levies and Charges 3a 6,889 7,054 Fees and Charges 3b 632 672 Rental Income 3c 399 353 Interest Revenue 3d 405 304 Sales Revenue 3c 4,160 5,085 Other Income 3f 213 297 Grants, Subsidies and Contributions 4a 35,948 10,509
Total Recurrent Revenue 48,646 24,274
Capital Revenue Grants, Subsidies and Contributions 4b 4,852 35,973
Total Revenue 53,498 60,247
Capital Income 5 5 240 Total Income 53,503 60,487
Expenses Recurrent Expenses Employee Benefits 6 11,649 10,361 Materials and Services 7 50,526 11,408 Finance Costs 8 347 318 Depreciation 12 10,662 10,329 9 Total Recurrent Expenses 73,184 32,416
Capital Expenses 9 68 16,895 Total Expenses 73,252 49,311
Net Result (19,749) 11,176
Other Comprehensive Income Items that will not be reclassified to Net Result Increase / (decrease) in Asset Revaluation Surplus 16 - (6,631) Total Comprehensive Income for the year (19,749) 4,545
The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 2 Cook Shire Council
Statement of Financial Position as at 30 June 2019
2019 2018 Notes $'000 $'000
ASSETS Current Assets Cash and Cash Equivalents 10 19,022 22,114 Trade and Other Receivables 11 2,458 2,031 Inventories 13 468 491
Total Current Assets 21,948 24,636
Non-Current Assets Property, Plant and Equipment 12 291,047 295,673
Total Non-Current Assets 291,047 295,673
TOTAL ASSETS 312,995 320,309
LIABILITIES Current Liabilities Trade and Other Payables 13 6,416 4,504 Borrowings 14 460 435 Provisions 15 986 892 Other Liabilities 24 - 972
Total Current Liabilities 7,862 6,803
Non-Current Liabilities Borrowings 14 4,208 4,657 Provisions 15 13,762 1,943 Other Liabilities 248 242
Total Non-Current Liabilities 18,218 6,842
TOTAL LIABILITIES 26,080 13,645
Net Community Assets 286,915 306,664
COMMUNITY EQUITY Asset Revaluation Surplus 16 225,061 225,061 Retained Surplus/(Deficiency) 17 59,175 78,947 Reserves 25 2,679 2,656 Total Community Equity 286,915 306,664
The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 3 Cook Shire Council
Statement of Changes in Equity for the year ended 30 June 2019
Council Asset Revaluation Retained Other Total Surplus Surplus Reserves Equity Notes $'000 $'000 $'000 $'000 2019 Balance as at 1 July 2018 225,061 78,947 2,656 306,664 a. Net Result - (19,749) - (19,749)
Total Comprehensive Income for the year - (19,749) - (19,749) b. Transfers to Reserves 17 & 25 - (23) 23 - Equity Balance as at 30 June 2019 225,061 59,175 2,679 286,915
Council Asset Revaluation Retained Other Total Surplus Surplus Reserves Equity Notes $'000 $'000 $'000 $'000 2018 Balance as at 1 July 2017 231,692 62,711 7,716 302,119 a. Net Result - 11,176 - 11,176 b. Other Comprehensive Income for the year - Revaluations : Property, Plant and Equipment 16 (6,631) - - (6,631) Other Comprehensive Income for the year (6,631) - - (6,631)
Total Comprehensive Income for the year (6,631) 11,176 - 4,545 c. Transfers from Reserves 25 - 361 (361) - d. Other transfers between Equity 25 - 4,699 (4,699) - Equity Balance as at 30 June 2018 225,061 78,947 2,656 306,664
The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 4 Cook Shire Council
Statement of Cash Flows for the year ended 30 June 2019
2019 2018 Notes $'000 $'000
Cash Flows from Operating Activities
Receipts from Customers 11,440 12,446 Payments to Suppliers and Employees (49,334) (22,100) (37,894) (9,654) Receipts: Interest Received 405 304 Rental Income 399 353 Non Capital Grants and Contributions 4(a) 35,948 10,509 Payments: Finance Costs (347) (280)
Net Cash inflow (outflow) from Operating Activities 21 (1,489) 1,232
Cash Flows from Investing Activities Receipts: Sale of Property, Plant and Equipment 5 225 580 Grants, Subsidies and Contributions 4(b) 4,852 35,973 Payments: Purchase of Property, Plant and Equipment 12 (6,256) (31,384)
Net Cash inflow (outflow) from Investing Activities (1,179) 5,169
Cash Flows from Financing Activities Receipts: Proceeds from Borrowings and Advances - 670 Payments: Repayment of Borrowings 14 (424) (371)
Net Cash Flow inflow (outflow) from Financing Activities (424) 299
Net Increase (decrease) in Cash and Cash Equivalents held (3,092) 6,700 plus: Cash and Cash Equivalents at the beginning of the financial year 22,114 15,414
Cash and Cash Equivalents at the end of the financial year 10 19,022 22,114
The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 5 Local Government Act 2009 Local Government Regulation 2012
Local Government Act 2009
Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 2(a). Council Functions - Component Descriptions
The activities relating to Council's functions as reported in Note 2(b) are as follows:
EXECUTIVE SERVICES
The objective of executive services is to be open, accountable, transparent and deliver value for money community outcomes. This function focuses on strategic and operational planning, risk management, legal and administrative support.
This function also includes the human resources and workplace health and safety functions of Council.
CORPORATE SERVICES
Provides the administrative services of Council including financial management, budget control, asset management, building maintenance, records management and customer service.
ECONOMIC DEVELOPMENT & COMMUNITY SERVICES
The goal of economic development and community services is to ensure Cook Shire is a vibrant community and remains attractive to visitors and investors.
This function is also responsible for providing community facilities including libraries and recreation facilities.
ENGINEERING SERVICES
Management of the engineering department and ensuring that the community is serviced by a high quality and effective road and drainage network. When applicable the department also oversees the restoration works as approved by the Disaster Recovery Funding Arrangements (DRFA).
The provision of a healthy safe community through the provision of sustainable water services through the supply of potable water, the maintenance of sewerage infrastructure assets and management of Council's waste and recycling programs and processes. This department also manages the operation of the Cooktown, Coen and Laura aerodromes, including maintenance and refuelling facilities, as well as the maintenance of parks and gardens and various gravel pits throughout Cook Shire.
PLANNING & ENVIRONMENTAL SERVICES
This function facilitates the Shire's growth through well planned and quality development through management of the planning and building practices and standards and to ensure that Cook Shire preserves the natural character of the region while overseeing environmental protection programs and effective animal control by enforcing Council's local laws.
page 9 page10
Financial Statements 2015 6 8 Financial Statements 2019 Statements Financial Total Total $'000 2,631 2,279 Assets Assets 62,246 11,402 59,254 11,677 236,710 312,995 247,091 320,309 Net Net (562) (401) (888) (505) $'000 $'000 Result Result (2,771) (2,254) (2,500) (2,087) 17,155 11,176 (13,761) (19,749) from from (401) (505) '0 $'000 $'000 $'000 7,970 (2,771) (5,419) (2,254) (2,500) (2,087) (8,143) (13,693) (24,538) (11,020) Recurring Recurring NetResult NetResult Operations Operations (509) (547) Total Total $'000 $'000 (2,822) (3,224) (2,611) (1,991) (2,756) (17,272) (49,425) (73,252) (41,406) (49,311) Expenses Expenses ------(68) $'000 $'000 Capital Capital (16,895) (16,895) Expenses Expenses (509) (547) $'000 $'000 (2,822) (3,224) (2,611) (1,991) (2,756) GrossProgram GrossProgram (17,272) (49,357) (68) (73,184) (24,511) (32,416) Recurring Recurring 51 42 7 - 970 111 Total Total $'000 $'000 16,710 53,503 19,146 40,519 Income Income - 35,664 - - - - 669 - - - 5 5 240 $'000 $'000 - - - - - Capital Capital $'000 $'000 4,852 4,852 8,945 59360,487 27,027 35,973 rnsOther Grants Grants 5- 25 20 42 Income Income 463 $'000 $'000 1,507 Other Other Other 12,699 11,733 13,765 GrossProgram GrossProgram 18108 108 - - 26 91 506 205 Recurring Recurring $'000 $'000 ,7 3,680 8,173 722842- 8,422 27,242 35,948 240 10,509 Grants Grants 2019 2018 Cook Shire Council Shire Cook Statements Financial the to Notes by Function ofResults Analysis 2(b). Note Total Total for the yearthe for ended June 30 2019 functions: following the to are capital attributed and recurring between expenses defined and Income Functions Functions &CmuiySrie 464 Executive Services CorporateServices Development Economic Community& Services Services Engineering &Planning Environmental Services 8,454 Executive Services 1,759 CorporateServices Development Economic Community& Services Services Engineering &Planning Environmental Services page xx Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 3. Revenue Analysis
2019 2018 Notes $'000 $'000
Revenue is recognised at the fair value of the consideration received or receivable, at the time indicated below.
(a). Rates, Levies and Charges
Rates are recognised as revenue at the start of the rating period. If a ratepayer pays their rates before the start of the rating period, they are recognised as revenue when they are received.
General Rates 3,438 3,598 Separate Rates 268 257 Water 881 884 Water Consumption, Rental and Sundries 968 1,006 Sewerage 1,252 1,252 Garbage Charges 445 408
Total rates and utility charge revenue 7,252 7,405
Less: Discounts (316) (305) Less: Pensioner remissions (47) (46) NET RATES, LEVIES AND CHARGES 6,889 7,054
(b). Fees and Charges
Fees and charges are recognised when council is unconditionally entitled to those funds. Generally this is upon lodgement of the relevant applications or documents, issuing of the infringement notice or when the service is provided.
Building and Development Fees 112 251 Other Statutory Fees and Charges 82 83 Airport Landing Fees 135 124 Waste Management and Transfer Fees 161 122 Swimming Pool Fees 45 49 Halls and Community Centre Fees 5 9 Other Fees and Charges 92 34 TOTAL FEES AND CHARGES 632 672
page 11 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 3. Revenue Analysis (continued)
2019 2018 Notes $'000 $'000
(c). Sales Revenue
The sale of goods is recognised when the customer has taken delivery of the goods. Revenue from services is recognised when the service is rendered.
Revenue from contracts and recoverable works generally comprises a recoupment of material costs together with an hourly charge for use of equipment and employees. This revenue and the associated costs are recognised by reference to the stage of completion of the contract activity at the reporting date. Where consideration is received for the service in advance it is included in other liabilities and is recognised as revenue in the period when the service is performed. There are no contracts in progress at the year end. The contract work carried out is not subject to retentions.
Sale of services Contract and Recoverable Works 3,361 4,473 Airport Services 710 527 Total Sale of Services 4,071 5,000
Sale of goods Other Sale of Goods 89 85 Total Sale of Goods 89 85
TOTAL SALES REVENUE 4,160 5,085
Note 4. Grants, Subsidies and Contributions
2019 2018 Grants, subsidies and contributions that are non-reciprocal in nature are recognised as revenue when Council obtains control over them, which is usually upon receipt of funds.
Physical assets contributed to Council by developers in the form of road works, stormwater, water and wastewater infrastructure and park equipment are recognised as revenue when the development becomes "on maintenance" (i.e. the Council obtains control of the assets and becomes liable for any ongoing maintenance) and there is sufficient data in the form of drawings and plans to determine the approximate
page 12 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 4. Grants, Subsidies and Contributions (continued)
2019 2018 specifications and values of such assets. Non-cash contributions with a value in excess of the recognition thresholds are recognised as non-current assets. Those below the thresholds are recorded as expenses.
Where grants are received that are reciprocal in nature, revenue is recognised as the various performance obligations under the funding agreement are fulfilled. Council does not currently have any reciprocal grants.
In June 2019, a Financial Assistance Grant of $5M was received in advance. The grant would normally have been paid in the following financial year. In June 2018 this grant was also received in advance.
2019 2018 Notes $'000 $'000
(a) Recurrent
General Purpose Grants 10,722 9,969 State Government Subsidies and Grants 763 487 Commonwealth Government Subsidies and Grants 131 40 Contributions - 12 Disaster Recovery Funding Arrangements (DRFA) 24,332 - Other - 1 TOTAL RECURRENT GRANTS, SUBSIDIES AND CONTRIBUTIONS 35,948 10,509
Expenditure incurred in accordance with Natural Disaster and Recovery Arrangements (NDRRA) and Disaster Recovery Funding Arrangements (DRFA) on roads is analysed to determine whether the expenditure is capital in nature. The analysis of expenditure requires Council engineers to review the nature and extent of expenditure on a given asset. Material expenditure that extends the useful life or service potential of the asset is capitalised. Expenditure incurred to remediate “minor” damage is classified as materials and services expenditure. Corresponding grant funding is classified as an operating or capital grant depending on the classification of expenditure. This is a new methodology applied by Council for the first time in the 2019 year.
(b) Capital
Capital Revenue includes grants and subsidies received which are tied to specific projects for the replacement or upgrade of existing non-current assets and/or investment in new assets. It also includes non-cash contributions which are usually infrastructure assets received from developers.
State Government Subsidies and Grants 3,719 6,854 Commonwealth Government Subsidies and Grants 1,130 2,087 Contributions 3 5 Disaster Recovery Funding Arrangements (DRFA) - 27,027 TOTAL CAPITAL GRANTS, SUBSIDIES AND CONTRIBUTIONS 4,852 35,973
page 13 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 5. Capital Income
2019 2018 Notes $'000 $'000
(a) Gain on disposal of non-current assets
Proceeds from the Disposal of Property, Plant and Equipment 225 580 Less: Book Value of Property, Plant and Equipment Disposed 12 (220) (340)
Gain on disposal of non-current assets 5 240
TOTAL CAPITAL INCOME 5 240
Note 6. Employee Benefits
2019 2018 Wages and Salaries 7,926 8,378 Annual, Sick and Long Service Leave Entitlements 2,355 1,789 Superannuation 20 1,201 1,061 Councillors Remuneration 440 415 - - 11,922 11,643
Other Employee Related Expenses 439 338
Less: Capitalised Employee Expenses (712) (1,620) TOTAL EMPLOYEE BENEFITS 11,649 10,361
Additional information:
Total Council Employees at year end:
Elected Members 7 7 Administration Staff 65 49 Depot and Outdoors Staff 76 88 - - Total full time equivalent employees 148 144
page 14 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 7. Materials and Services
2019 2018 Notes $'000 $'000
Advertising and Marketing 136 96 Audit of Annual Financial Statements by the Auditor-General of Queensland 78 77 Consultants 705 785 Contractors 2,930 4,526 Donations Paid 63 79 Insurance 503 493 Subscriptions and Registrations 116 137 Travel 204 189 Fuel and Oils 854 688 IT - Software & Hardware 208 311 Legal Costs 136 211 Management Fees 472 201 Royalties 214 133 Utilities 841 897 Disaster Recovery Funding Arrangements (DRFA) 27,964 - Establish Provision for Tip Restoration 11,654 - Other Materials and Services 3,448 2,585 TOTAL MATERIALS AND SERVICES 50,526 11,408
Total audit fees quoted by the Queensland Audit Office relating to the 2018-19 financial statements are $77,500 (2018: $77,500).
Disaster Recovery Funding Arrangements (DRFA) formerly Natural Disaster Rel Recovery Arrangements (NDRRA) are a joint funding initiative of the Commonwealth and State Governments to provide disaster relief and recovery payments and infrastructure to help communities recover from the effects of natural disasters. Further is provided in Note 4.
Note 8. Finance Costs
2019 2018 Finance costs - Queensland Treasury Corporation 260 263 Bank Charges 48 17 Quarry Rehabilitation 39 38 TOTAL FINANCE COSTS 347 318
Note 9. Capital Expenses
2019 2018 Discount Rate Adjustment - Quarry Rehabilitation 68 - Loss on Write-Off of Assets - 16,895 - - TOTAL CAPITAL EXPENSES 68 16,895 page 15 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 10. Cash and Cash Equivalents
2019 2018 Notes $'000 $'000
Cash and cash equivalents include cash on hand, all cash and cheques receipted but not banked at the year end, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to cash and which are subject to an insignificant risk of changes in value, and bank overdrafts.
Cash and deposits at call are held in the Westpac Bank in a normal business cheque account. On call accounts are also held with QTC.
Cash and Cash Equivalents
Cash at Bank and on Hand 1,171 7,006 Cash Equivalent Assets - Deposits at Call 17,851 15,108 - - Total Cash and Cash Equivalents 19,022 22,114
BALANCE AS PER STATEMENT OF CASH FLOWS 19,022 22,114
Restricted Cash, Cash Equivalents and Investments Council's Cash and Cash Equivalents are subject to a number of Internal and External Restrictions that limit amounts available for discretionary of future use. These include: Externally imposed Expenditure Restrictions at the reporting date relate to the following cash assets: Unspent Government Grants and Subsidies 1,029 8,216 Unspent Loan Monies 1,300 1,300 Total External Restrictions 2,329 9,516 Total Unspent Restricted Cash 2,329 9,516
Cash at Bank and on hand at 30 June 2019 includes $86,565 received from the State government to mitigate the direct impacts on households of the State Waste Levy, which comes into effect from 1 July 2019. This money has been set aside to help fund the Council's 2019-20 Levy expense.
page 16 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 10. Cash and Cash Equivalents (continued)
2019 2018 Notes $'000 $'000
Trust Funds
In accordance with the Local Government Act 2009 and Local Government Regulation 2012 , a separate trust bank account and separate accounting records are maintained for funds held on behalf of outside parties. Funds held in the trust account include those funds from the sale of land for arrears in rates, deposits for the contracted sale of land, security deposits lodged to guarantee performance and unclaimed monies (e.g. wages). The Council performs only a custodian role in respect of these monies and because the monies cannot be used for Council purposes, they are not considered revenue nor brought to account in the financial statements.
Trust funds held for outside parties
Monies collected or held on behalf of other entities yet to be paid out to or on behalf of those entities 224 210 Security Deposits 15 16 239 226
Note 11. Trade and Other Receivables
2019 2018 Receivables are amounts owed to council at year end. They are recognised at the amount due at the time of sale or service delivery. Settlement is required within 30 days after the invoice is issued.
Debts are regularly assessed for collectability and allowance is made, where appropriate, for impairment. All known bad debts were written-off at 30 June. If an amount is recovered in a subsequent period it is recognised as revenue.
Because Council is empowered under the provisions of the Local Government Act 2009 to sell an owner's property to recover outstanding rate debts, Council does not impair rate receivables.
The fair value of trade and other receivables and payables is assumed to approximate the value of the original transaction, less any allowance for impairment.
page 17 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 11. Trade and Other Receivables (continued)
2019 2018 Notes $'000 $'000
Current
Rateable Revenue and Utility Charges 1,452 1,168 Water Charges not yet Levied 373 416 Other Debtors 695 530 Prepayments 93 69 Other - 3 Total 2,613 2,186 less: Provision for Impairment Rateable Revenue and Utility Charges (105) (105) Other Debtors (50) (50) Total Provision for Impairment - Receivables (155) (155)
TOTAL CURRENT TRADE AND OTHER RECEIVABLES 2,458 2,031
Interest is charged on outstanding rates at a rate of 11% per annum. No interest is charged on other debtors. There is no concentration of credit risk for rates and utility charges, fees and other debtors receivable.
Ageing of past due receivables and the amount of any impairment is as follows:
Receivables
Fully Performing 1,153 860 Past due: - 31 to 60 days overdue 57 20 - 61 to 90 days overdue 30 19 - Greater than 90 days overdue 1,373 1,108 - Impaired (155) (155) Total 2,458 1,852
Council applied AASB 9 for the first time this year. As a result Council has calculated the impairment of receivables in a different way for 2019, using a lifetime expected loss allowance.
This has not had a significant impact on the financial statements.
page 18 Financial Statements 2015 - - (810) (590) 2,299 6,256 4,550 10,662 Total 14,384 135,222 416,511 430,895
page19 Works in Works Progress Financial Statements 2019 Other Structures ae Sewerage Water Road, Bridge Bridge Network Drainage and 0 3 0 3 - 130 609 136 604 Equipment Furnitureand Plantand Equipment - ,5 4 - - 3,582 ------359 - 145,294 846 - 2,038 - 522 - 9,956 6,226 2,395 1,003 - - 20,526 (810) 6,749 6,849 6,619 78,266 - - 21,529 - - 16 831 84,885 166 (590) - 985 5,720 847 21,615 - 1,533 1,158 6,115 - 897 - 22,774 - - 1,452 69 984 1,748 - 8925,9 - 5,7 9102,8 897- 18,927 3,582 26,189 18,927 49,100 436,341 26,189 3,001 251,676 49,100 - 19,341 251,676 27,099 846 291,047 - 50,670 3,001 253,077 9,956 16,946 51,697 915 51,697 20,350 18,922 18,922 10,147 29,141 53,169 168,192 68 18,922 4,032 30,395 18,922 adBuildings Land $00 '0 '0 '0 '0 '0 '0 '0 '0 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 arVleFi au otCs arVleFi au arVleFi au Cost Value Fair Value Fair Value Fair Value Fair Cost Cost Value Fair Value Fair 9 5,9 5,9 Note CookShire Council Notestothe Financial Statements Note Property,12. Plant andEquipment 30 June 2019 June 30 2019 June 30 asat and Equipment Property, Plant of Value Down Written Total Adtos - - - - 6,256 - - - - - (6,849) 166 - - 1,533 - - 897 - - - 1,452 36 69 - - 924 984 - 761 1,748 - - 848 69 - deprec. Not - 100 50 738 - - 100 12 - 80 20 1,174 - 180 15 2019 June 30 ended year the for - 10 - 3 20 - 3 - 100 30 deprec. Not Cost at - Value Gross Opening Value Fair at - Value Gross Opening 2018 July 1 at as Value Gross Opening Additions* Transfers Progress in Work 2019 June 30 at as Equipment and Plant Property, of Value Gross Closing 2018 July 1 at as Depreciation Accumulated Opening Expense Depreciation Disposals 2019 June 30 at as Equipment and Plant ofProperty, Depreciation Accumulated Total Information Other Value Residual (years) Life Useful Estimated of Range Comprise Additions *Asset Renewals Asset Additions Asset Total Measurement Basis Measurement OhrAdtos- 7 4 - 246 574 - Disposals Additions Other Th Co page xx Financial Statements 2015 - - - - (867) 5,160 8,189 (1,207) (1,471) (1,264) (1,264) 10,329 Total 22,848 31,384 23,195 (16,895) 397,500 420,348 121,864
page20
Works in Works Progress Financial Statements 2019 Other Structures 1551,4 (39,633) 10,842 505 61 ae Sewerage Water Road, Bridge Bridge Network Drainage and Equipment Furnitureand Plantand Equipment - 01881- - 11,829 ------851 (16,895) - (1,471) - - 243 - 10,168 - - 1,773 - 539 - 135,222 - - - 5,686 - 962 - 19,567 - 5,160 - 2,038 6,439 67,931 - - 6,226 - 826 10 - 20,526 - (867) 5,548 1,030 78,266 20,533 - 1,106 831 - - - 5,720 - - 21,615 - 4)- 117 ------(1,167) - (40) 3 ,2 ,0 698601082041,9 31,384 16,895 2,004 1,078 650 6,988 - 1,108 2,224 437 8914,3 - 4,5 8902,8 ,4 - 7,649 11,829 25,684 7,649 48,920 25,684 246,951 - 48,920 430,895 3,582 246,951 - 851 18,927 26,189 10,168 49,335 49,100 49,335 18,961 251,676 295,673 18,961 846 3,582 16,889 9,956 19,963 51,697 28,574 18,922 173,410 15 4,236 30,082 18,922 adBuildings Land $00 '0 '0 '0 '0 '0 '0 '0 '0 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 arVleFi au otCs arVleFi au arVleFi au Cost Value Fair Value Fair Value Fair Value Fair Cost Cost Value Fair Value Fair 9 16 16 5,9 5,9 5,9 Note (continued) CookShire Council Notestothe Financial Statements Note Property,12. Plant andEquipment 30 June 2018 June 30 2018 June 30 asat and Equipment Property, Plant of Value Down Written Total Rcasfctos1 2)9 5 124 4 2 - 25 - - - 411 - (4) - 26 - - (1,264) (4) - (5) 123 24,882 - - 1 (526) (3) 9 - - - 16,895 946 (1,267) (26) 143 (5) - 2,397 1,861 - 3 1 521 - 557 9 - (8) - 494 156 (24) - - 2,353 - 4,635 - - - - 2019 June 30 ended year the for deprec. Not - 100 50 942 - 166 - 100 12 - - 80 20 1,847 377 - 180 15 - 10 - 3 437 Cost at - Value Gross Opening 20 - 3 Value Fair at - Value Gross Opening 2017 July 1 at as Value Gross Opening - 100 30 deprec. Not Write-offs (ARS) Equity to Decrements Revaluation Transfers Progress in Work classes between asset transfers Internal Reclassifications 2018 June 30 at as Equipment and Plant Property, of Value Gross Closing 2017 July 1 at as Depreciation Accumulated Opening Expense Depreciation Disposals (ARS) Equity to Decrements Revaluation classes between asset transfers Internal Reclassifications Equipment and Plant Property, Impairment and Depreciation Accumulated Total Information Other Value Residual (years) Life Useful Estimated of Range Comprise Additions *Asset Renewals Asset Additions Other Additions Asset Total Measurement Basis Measurement Adtos - - - - 31,384 ------Additions* Disposals page xx Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements
Council measures and recognises the following assets at fair value on a recurring basis:
- Land - Buildings - Road, drainage and bridge network - Water - Sewerage - Other structures
Council does not measure any liabilities at fair value on a recurring basis.
Council has assets and liabilities which are not measured at fair value, but for which fair values are disclosed in the other notes.
Council borrowings are measured at amortised cost with interest recognised in profit or loss when incurred. The fair value of borrowings disclosed in Note 14 is provided by the Queensland Treasury Corporation and represents the contractual discounted cash flows at balance date (level 2).
The carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature (level 2).
Council also has assets measured at fair value on a non-recurring basis as a result of being reclassified as assets held for sale. These comprise land previously used as a depot. A description of the valuation techniques and the inputs used to determine the fair value of this land is included below under the heading "Land (level 2)".
In accordance with AASB 13 fair value measurements are categorised on the following basis: - Fair value based on quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) - Fair value based on inputs that are directly or indirectly observable for the asset or liability (level 2) - Fair value based on unobservable inputs for the asset and liability (level 3)
The following table categorises fair value measurements as either level 2 or level 3 in accordance with AASB 13. Council does not have any assets or liabilities measured at fair value which meet the criteria for categorisation as level 1.
The fair values of the assets are determined using valuation techniques which maximise the use of observable data, where it is available, and minimise the use of entity specific estimates. If all significant inputs required to fair value an asset are observable, the asset is included in level 2. If one or more of the significant inputs is not based on observable market data, the asset is included in level 3. This is the case for Council infrastructure assets, which are of a specialist nature for which there is no active market for similar or identical assets. These assets are valued using a combination of observable and unobservable inputs.
page 21 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements (continued)
(1) The following table presents all assets and liabilities that have been measured and recognised at fair values: Fair Value Measurement using: Level 1 Level 2 Level 3 Total Date Quoted Significant Significant of latest prices in observable unobservable valuation active mkts inputs inputs 2019 $'000 $'000 $'000 $'000 Property, Plant and Equipment - Land 30/06/17 - 18,922 - 18,922 - Buildings 30/06/17 - - 30,395 30,395 - Road, drainage and bridge network 30/06/18 - - 168,192 168,192 - Water 30/06/17 - - 29,141 29,141 - Sewerage 30/06/17 - - 20,350 20,350 - Other structures 30/06/17 - - 16,946 16,946 Total Property, Plant and Equipment - 18,922 265,024 283,946
2018 $'000 $'000 $'000 $'000 Property, Plant and Equipment - Land 30/06/17 - 18,922 - 18,922 - Buildings 30/06/17 - - 30,082 30,082 - Road, drainage and bridge network 30/06/18 - - 173,410 173,410 - Water 30/06/17 - - 28,574 28,574 - Sewerage 30/06/17 - - 19,963 19,963 - Other structures 30/06/17 - - 16,889 16,889 Total Property, Plant and Equipment - 18,922 268,918 287,840
(2) Valuation techniques used to derive Level 2 and Level 3 Fair Values
Where Council is unable to derive Fair Valuations using quoted market prices of identical assets (ie. Level 1 inputs) Council instead utilises a spread of both observable inputs (Level 2 inputs) and unobservable inputs (Level 3 inputs).
page 22 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements (continued)
(2) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued)
The Fair Valuation techniques Council has employed while utilising Level 2 and Level 3 inputs are as follows:
Property, Plant and Equipment
Land (level 2)
Land fair values were determined by independent valuer, Cardno (Qld) Pty Ltd effective 30 June 2017. Level 2 valuation inputs were used to value land in freehold title as well as land used for special purposes, which is restricted in use under current zoning rules. Sales prices of comparable land sites in close proximity are adjusted for differences in key attributes such as property size. The most significant inputs into this valuation approach are price per square metre.
At 30 June 2019, Council undertook a desktop assessment of market trends in the Cook LGA since the date of the last comprehensive revaluation. There have been no dominant factors indicating the fair value of Council's land assets would be materially different to the current carrying value. On this basis Council have not applied any indexation at 30 June 2019.
Buildings (level 3)
The fair value of buildings were also were determined by independent valuer, Cardno (Qld) Pty Ltd effective 30 June 2017. Where there is a market for Council building assets, fair value has been derived from the sales prices of comparable properties after adjusting for differences in key attributes such as property size. The most significant inputs into this valuation approach were price per square metre.
Where Council buildings are of a specialist nature and there is no active market for the assets, fair value has been determined on the basis of replacement with a new asset having similar service potential including allowances for preliminaries and professional fees. The gross current values have been derived from reference to market data for recent projects and costing guides issued by the Australian Institute of Quantity Surveyors, Rawlinson's (Australian Construction Handbook). Where a depth in market can be identified, the net current value of a building asset is the difference between the market value of the asset as a whole (including land) and the market value of the land component. Where there is no depth of market, the net current value of a building asset is the gross current value less accumulated depreciation to reflect the consumed or expired service potential of the asset. The average cost of construction used to calculate the gross current value of Council's buildings was $1,325/sqm for residential and $1,328/sqm for commercial buildings.
In determining the level of accumulated depreciation the asset has been disaggregated into significant components which exhibit useful lives. Allowance has been made for the typical asset life cycle and renewal treatments of each component at the time the asset is considered to be no longer available for use and the condition of the asset. Condition was assessed taking into account both physical characteristics as well as holistic factors such as functionality, capability, utilisation and obsolescence.
page 23 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements (continued)
(2) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued)
Property, Plant and Equipment (continued)
Buildings (level 3) (continued)
While the unit rates based on square metres can be supported by market evidence (level 2), useful life, pattern of consumption and asset condition that are used to calculate accumulated depreciation comprise unobservable inputs (level 3). Where these other inputs are significant to the valuation the overall valuation has been classified as level 3.
At 30 June 2019, Council undertook a desktop review of fair value by assessing the movement in the Asset revaluation index: Non-residential construction, Queensland, March qtr 1998 to June qtr 2019 since the date of the last comprehensive revaluation. An increment of 0.89% was noted. Council also considered the movement in the Producer price index: Building construction, Queensland, September qtr 1998 to December qtr 2018. An increment of 0.93% was noted. Council have not applied indexation at 30 June 2019 on the basis of materiality.
Infrastructure assets (level 3)
Road, drainage and bridge network, water, sewerage and other structures
All Council infrastructure assets were fair valued using written down current replacement cost (CRC). This valuation comprises the asset's current replacement cost (CRC) less accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. Council first determined the gross cost of replacing the full service potential of the asset and then adjusted this amount to take account of the expired service potential of the asset.
CRC was measured by reference to the lowest cost at which the gross future economic benefits of the asset could currently be obtained in the normal course of business. Where existing assets were over designed, had excess capacity, or were redundant an adjustment was made so that the resulting valuation reflected the cost of replacing the existing economic benefits based on an efficient set of modern equivalent assets to achieve the required level of service output within the Council's planning horizon.
The unit rates (labour and materials) and quantities applied to determine the CRC of an asset or asset component were based on a "Greenfield" assumption meaning that the CRC was determined as the full cost of replacement with a new asset including components that may not need to be replaced, such as earthworks. The DRC was determined using methods relevant to the asset class as described under individual asset categories below.
page 24 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements (continued)
(2) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued)
Property, Plant and Equipment (continued)
Specific valuation techniques used to value Council infrastructure assets comprise:
1(a) Road, drainage and bridge network - calculation of current replacement cost
Roads Current replacement cost: Council categorises its road infrastructure into urban and rural roads and then further sub-categorises these into sealed and unsealed roads. All road segments are then componentised into formation, pavement and seal (where applicable). The majority of council roads are in Cape York Peninsula and subject to severe annual climatic events. Council assess all roads annually after the 'wet season' to assess damage and with National Disaster Relief and Recovery Arrangements (NDRRA) funding conducts restoration works, as a result, rural roads have an average condition rating applied.
CRC was calculated by reference to asset linear and area specifications, estimated labour and material inputs, services costs, and overhead allocations. Council's urban road pavements are constructed to an average depth of 200mm, while rural roads vary due to the variety of terrain and soil quality. Due to the remote location and vast size of Cook Shire (116,000 sq km) raw materials (gravel & water) are sourced from various locations therefore construction costs vary significantly. For internal construction estimates, material and services prices were based on Council's Enterprise Bargaining Agreement (EBA).
The last full valuation of road infrastructure was undertaken effective 30 June 2018 by Cardno (Qld) Pty Ltd. At 30 June 2019,Council undertook a desktop review of fair value by assessing the movement in the Asset revaluation index: Engineering construction, Queensland, March qtr 1998 to June qtr 2019 since the date of the last comprehensive revaluation. An increment of 3.88% was noted. Council also considered the movement in the Producer price index: Road and bridge construction, Queensland, September qtr 1998 to December qtr 2018 and the Producer price index: Other heavy and civil construction, Queensland, September qtr 1998 to December qtr 2018. An average increment of 2.05% was noted. Council have not applied indexation at 30 June 2019 on the basis of materiality.
Accumulated depreciation: In determining the level of accumulated depreciation, roads were disaggregated into significant components which exhibited different useful lives.
page 25 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements (continued)
(2) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued)
Property, Plant and Equipment (continued)
Bridges Current replacement cost: A full valuation of bridges assets was undertaken by independent valuers, Cardno (Qld) Pty Ltd 30 June 2018. Each bridge is assessed individually, with the valuation varying according to the material type used for construction, the deck area, condition and size. Construction estimates were determined on a similar basis to roads. At 30 June 2019 the same desktop valuation considerations were applied to bridge assets, as outlined in the Road section above. Accumulated depreciation: In determining the level of accumulated depreciation, remaining useful lives were calculated based on condition assessments. The condition assessments were made using a scale where the relationship between the condition score and the remaining service potential of the asset is inverse.
Drainage Current replacement cost: A full valuation of drainage infrastructure was undertaken by independent valuers, Cardno (Qld) Pty Ltd effective 30 June 2018. Drainage assets are managed by components - culverts, pipes and channels being the major types. At 30 June 2019 the same desktop valuation considerations were applied to drainage assets, as outlined in the Road section above.
Council assumes that each component is designed and constructed to the same standard and uses a consistent amount of labour and materials. Where drainage assets are located underground and physical inspection is not possible, the age, size and type of construction material, together with current and planned maintenance records are used to determine the fair value at reporting date. Construction estimates were determined on a similar basis to bridges.
Accumulated depreciation: In determining the level of accumulated depreciation, drainage assets were disaggregated into significant components which exhibited different useful lives.
Estimates of expired service potential and remaining useful lives were determined on a straight line basis based on industry standard practices and past experience, supported by maintenance programs.
1(b) Road, drainage and bridge network, bridges and drainage – Sensitivity of valuation to unobservable inputs
As detailed above Council's roads, drainage and bridge network has been valued using written down current replacement cost. This method utilises a number of inputs that require judgement and are therefore classed as unobservable. While these judgements are made with the greatest care, and based upon years of experience, different judgements could result in a different valuation.
page 26 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements (continued)
(2) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued)
Property, Plant and Equipment (continued)
2(a) Water, Sewerage and Other Infrastructure – Calculation of written down current replacement cost
Water and sewerage infrastructure Current replacement cost: Water and sewerage infrastructure fair values were determined by independent valuers, Cardno (Qld) Pty Ltd effective 30 June 2017. CRC was calculated based on expected replacement costs. In all cases the assets were disaggregated to component level to ensure a reliable measure of cost and service capacity and deterioration of estimated remaining life.
At 30 June 2019, Council undertook a desktop review of fair value by assessing the movement in a range of cost indices since the date of the last comprehensive revaluation including the Asset revaluation index: Non-residential construction, Queensland, March qtr 1998 to June qtr 2019, Asset revaluation index: Non-residential construction, Queensland, March qtr 1998 to June qtr 2019, Producer price index:Non-residential building construction Queensland, September qtr 1998 to December qtr 2018 and the Producer price index:Other heavy and civil engineering construction Australia, September qtr 1998 to December qtr 2018. An average increment of 3.71% was noted. Council have not applied indexation at 30 June 2019 on the basis of materiality.
Accumulated depreciation: In determining accumulated depreciation, assets were either subject to a site inspection or an assessment to determine remaining useful life. Where site inspections were conducted (i.e. for active assets), the assets were allocated a condition assessment.
Where site inspections were not conducted (i.e. for passive assets and active assets for which no site inspections were undertaken), the remaining useful life was calculated on an age basis after taking into consideration current and planned maintenance records.
Useful life of unlined sewers has been determined based on an assessment of industry standards, manufacturers data and performance history. Useful lives of re-lined pipes have been based on the manufacturers recommendations for the materials used.
The assets were disaggregated to component level to ensure a reliable measure of cost and service capacity and deterioration of estimated remaining life.
In determining the level of accumulated depreciation the asset has been disaggregated into significant components which exhibit different useful lives. Allowance has been made for the typical asset life cycle and renewal treatments of each component at the time the asset is considered to be no longer available for use and the condition of the asset. Condition was assessed taking into account both physical characteristics as well as holistic factors such as functionality and obsolescence.
page 27 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 12. Property, Plant and Equipment (continued)
(a) Recognised Fair Value Measurements (continued)
(2) Fair value measurements using significant unobservable inputs (Level 3) (continued)
The Valuation Process for Level 3 Fair Value Measurements Council approves the valuation policies and the valuation procedures are reviewed and approved by the executive management team. They are reviewed annually taking into consideration an analysis of movements in fair value and other relevant information. Council's current policy for the valuation of property, plant and equipment is set out in note 12. Non-recurring fair value measurements are made at the point of reclassification by a registered valuer and revalued if necessary.
Note 13. Trade and Other Payables
Creditors are recognised when goods or services are received, at the amount owed. Amounts owing are unsecured and are generally settled on 30 day terms.
Liabilities are recognised for employee benefits such as wages and salaries, sick, annual and long service leave in respect of services provided by the employees up to the reporting date. The liability is calculated using the present value of remuneration rates that will be paid when the liability is expected to be settled and includes related on-costs.
As Council does not have an unconditional right to defer settlement of the annual leave beyond twelve months after the reporting date, annual leave is classified as a current liability.
Council has an obligation to pay sick leave on termination to certain employees and therefore a liability has been recognised for this obligation.
2019 2018 Notes $'000 $'000
Creditors and Accruals 4,709 3,072 Security Bonds, Deposits and Retentions - 15 Employee related accruals 92 84 Annual Leave 1,318 1,098 Sick Leave 77 35 Other Entitlements 132 104 Waste Levy refund received in advance 87 - Other 1 96 TOTAL CURRENT TRADE AND OTHER PAYABLES 6,416 4,504
The State government made an advance payment to Council in June 2019 to mitigate the impacts on households for 2019-20 of the State Waste Levy, which takes effect from 1 July 2019. The Council will be liable to the State for payment of the Levy on most forms of commercial and household waste delivered to its disposal sites from 1 July 2019. The State is required to make an annual payment to the Council that essentially refunds the Council for the portion of the Levy that relates to households. Council will fund the portion of the Levy that relates to commercial waste through charges to commercial users of disposal sites from 1 July 2019. As the receipt from the State in June 2019 is for a refund of Council's 2019-20 Levy expense, the full amount has been recognised as a liability at 30 June 2019. page 28 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 14. Borrowings
Borrowings are initially recognised at fair value plus any directly attributable transaction costs. Thereafter, they are measured at amortised cost. Principal and interest repayments are made quarterly in arrears.
All borrowings are in $A denominated amounts and interest is expensed as it accrues. No interest has been capitalised during the current or comparative reporting period. Expected final repayment dates vary from 15 December 2025 to 15 March 2038 (Available from QTC Maturity Analysis). There have been no defaults or breaches of the loan agreement during the period.
Council adopts an annual debt policy that sets out council's planned borrowings for the next nine years. Council's current policy is to only borrow for capital projects and for a term no longer than the expected life of the asset. Council also aims to comply with the Queensland Treasury Corporation's borrowing guidelines and ensure that sustainability indicators remain within acceptable levels at all times.
2019 2018 Notes $'000 $'000
Current
Loans - Queensland Treasury Corporation 460 435
TOTAL CURRENT BORROWINGS 460 435
Non-current
Loans - Queensland Treasury Corporation 4,208 4,657
TOTAL NON-CURRENT BORROWINGS 4,208 4,657
Reconciliation of Loan Movements for the year Loans - Queensland Treasury Corporation Opening Balance at Beginning of Financial Year 5,092 4,793 Loans Raised - 670 Principal Repayments (424) (371) Book value at end of financial year 4,668 5,092
The QTC loan market value at the reporting date was $5,371,952. This represents the value of the debt if Council repaid it at that date. As it is the intention of Council to hold the debt for its term, no provision is required to be made in these accounts.
No assets have been pledged as security by the Council for any liabilities, however all loans are guaranteed by the Queensland Government. Principal and interest repayments are made quarterly in arrears.
In March 2019, the overdraft facility with Queensland Treasury Corporation (QTC) with a limit of $10,000,000, expired and subsequently in July 2019, an ongoing overdraft facility with QTC was approved with a limit of $5,000,000.
The fair value of borrowings with QTC is based on the market value of the debt outstanding. The market value of a debt obligation is the discounted value of future cash flows based on prevailing market rates and represents the amount required to be repaid if this was to occur at balance date. The market value of debt is provided by QTC.
page 29 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 15. Provisions
2019 2018 Long Service Leave The provision for long service leave represents the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date. The liability is calculated using current pay rates and projected future increases in those rates and includes related employee on-costs. The estimates are adjusted for the probability of the employee remaining in the Council's employment or other associated employment which would result in the Council being required to meet the liability. Adjustments are then made to allow for the proportion of the benefit earned to date, and the result is discounted to present value. The interest rates attaching to Commonwealth Government guaranteed securities at the reporting date are used to discount the estimated future cash outflows to their present value.
Where employees have met the prerequisite length of service and council does not have an unconditional right to defer this liability beyond 12 months long service leave is classified as a current liability. Otherwise it is classified as non-current.
Quarry rehabilitation The provision for quarry rehabilitation represents the present value of the anticipated future costs associated with the closure of the quarries, refilling the basin, and reclamation and rehabilitation of these sites. The calculation of this provision requires assumptions such as application of environmental legislation, site closure dates, available technologies and engineering cost estimates. These uncertainties may result in future actual expenditure differing from amounts currently provided. Because of the long-term nature of the liability, the most significant uncertainty in estimating the provision is the costs that will be incurred. The provision recognised for quarry rehabilitation is reviewed at least annually and updated based on the facts and circumstances available at the time. Management estimates that the restoration will occur in 2024.
Quarries are situated on Council controlled land and are classified as land and improvement assets. The provision for restoration is, therefore, included in the cost of the land and amortised over the expected useful life of the quarry. Changes in the provision not arising from the passing of time are added to or deducted from the asset revaluation surplus for land. If there is no available revaluation surplus, increases in the provision are treated as an expense and recovered out of future decreases (if any). Changes to the provision resulting from the passing of time (the unwinding of the discount) are treated as a finance cost.
Landfill A provision is made for the cost of restoring refuse dumps where it is probable the Council will be liable, or required, to do this when the use of the facilities is complete.
The provision for refuse restoration is calculated as the present value of anticipated future costs associated with the closure of the dump sites, decontamination and monitoring of historical residues and leaching of these sites. The calculation of this provison requires assumptions such as application of environmental legislaiton, site closure dates, available technologies and engineering cost estimates. These uncertainties may result in future actual expenditure differing from amounts currently provided. Because of the long-term nature of the liability, the most significant un- certainty in estimating the provison is the costs that will be incurred. The provision recognised for dump sites has been established at 30 June 2019. It is expected this provision will be reviewed annually and updated based on the facts and circumstances available at the time.
The provision for restoration is treated as an expense in 2019 as this is the first year the provision has been recognised. Changes in the provision are treated as an expense or income.
page 30 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 15. Provisions (continued)
2019 2018 Notes $'000 $'000
Current
Long Service Leave 986 892 TOTAL CURRENT PROVISIONS 986 892
Non-current
Long Service Leave 287 229 Refuse Restoration 11,654 - Gravel pit sites 1,821 1,714 TOTAL NON-CURRENT PROVISIONS 13,762 1,943
Details of movements in Provisions:
Long Service Leave Balance at Beginning of Financial Year 1,121 1,119 Amount provided for in the year 213 12 Amount paid in the year (61) (10) Balance at End of Financial Year 1,273 1,121
Gravel pit sites Balance at Beginning of Financial Year 1,714 1,675 Additional Provision 68 1 Increase due to change in time 39 38 Balance at End of Financial Year 1,821 1,714
page 31 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 16. Asset Revaluation Surplus
2019 2018 Notes $'000 $'000
The asset revaluation surplus comprises adjustments relating to changes in value of property, plant and equipment that do not result from the use of those assets. Net incremental changes in the carrying value of classes of non-current assets since their initial recognition are accumulated in the asset revaluation surplus. Increases and decreases on revaluation are offset within a class of assets.
Where a class of assets is decreased on revaluation, that decrease is offset first against the amount remaining in the asset revaluation surplus in respect of that class. Any excess is treated as an expense.
When an asset is disposed of, the amount reported in surplus in respect of that asset is retained in the asset revaluation surplus and not transferred to retained surplus.
Movements in the asset revaluation surplus:
Balance at beginning of financial year 225,061 231,692
Net adjustment to non-current assets at end of period to reflect a change in: Road, Drainage and Bridge Network - (6,631) Balance at end of financial year 225,061 225,061
Asset revaluation surplus analysis
The closing balance of the Asset Revaluation Surplus comprises the following asset categories:
Land 14,041 14,041 Buildings 10,197 10,197 Road, Drainage and Bridge Network 175,836 175,836 Water 19,229 19,229 Sewerage 5,086 5,086 Other Structures 672 672 Balance at end of financial year 225,061 225,061
page 32 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 17. Retained Surplus
2019 2018 Notes $'000 $'000
Movements in the retained surplus:
Retained Surplus at Beginning of Financial Year 78,947 62,711
Net Result Attributable to Council (19,749) 11,176
Transfers (to)/from Capital Reserves for Future Capital Project Funding, or from Reserves Funds that have been Expended or Closed: 25 Refuse levy reserve (23) 361 - Grant received in advance reserve - 4,699
Retained surplus at end of financial year 59,175 78,947
Note 18. Commitments for Expenditure
2019 2018 Contractual commitments
Contractual commitments at end of financial year but not recognised in the financial statements are as follows: Kerbside garbage collection - expires March 2020 166 269 166 269
page 33 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 19. Contingent Liabilities
Council Details and estimates of maximum amounts of contingent liabilities are as follows:
Local Government Mutual
The Council is a member of the local government mutual liability self-insurance pool, LGM Queensland. In the event of the pool being wound up or it is unable to meet its debts as they fall due, the trust deed and rules provide that any accumulated deficit will be met by the individual pool members in the same proportion as their contribution is to the total pool contributions in respect to any year that a deficit arises.
As at 30 June 2019 the financial statements reported an accumulated surplus and it is not anticipated any liability will arise.
Local Government Workcare
The Council is a member of the Queensland local government worker's compensation self-insurance scheme, Local Government Workcare. Under this scheme the Council has provided an indemnity towards a bank guarantee to cover bad debts which may remain should the self insurance licence be cancelled and there was insufficient funds available to cover outstanding liabilities. Only the Queensland Government’s workers compensation authority may call on any part of the guarantee should the above circumstances arise. The Council's maximum exposure to the bank guarantee is $348,580.
Note 20. Superannuation
Council contributes to the LGIAsuper Regional Defined Benefits Fund (the scheme), at the rate of 12% for each permanent employee who is a defined benefit member. This rate is set in accordance with the LGIAsuper trust deed and may be varied on the advice of an actuary. The Regional Defined Benefits Fund is a complying superannuation scheme for the purpose of the Commonwealth Superannuation Industry (Supervision) legislation and is also governed by the Local Government Act 2009 .
The scheme is a defined benefit plan, however Council is not able to account for it as a defined benefit plan in accordance with AASB119 because LGIAsuper is unable to account for its proportionate share of the defined benefit obligation, plan assets and costs.
page 34 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 20. Superannuation (continued) Notes $'000 $'000
Any amount by which the scheme is over or under funded may affect future benefits and result in a change to the contribution rate, but has not been recognised as an asset or liability of the Council.
Technically Cook Shire Council can be liable to the scheme for a portion of another local governments’ obligations should that local government be unable to meet them. However the risk of this occurring is extremely low and in accordance with the LGIAsuper trust deed changes to council's obligations will only be made on the advice of an actuary.
The last completed actuarial assessment of the scheme was undertaken as at 1 July 2018. The actuary indicated that “At the valuation date of 1 July 2018, the net assets of the scheme exceeded the vested benefits and the scheme was in a satisfactory financial position as at the valuation date." Cook Shire Council is not aware of anything that has happened since that time that indicates the assets of the scheme are not sufficient to meet the vested benefits, as at the reporting date.
No changes have been made to prescribed employer contributions which remain at 12% of employee assets and there are no known requirements to change the rate of contributions.
The next triennial actuarial review is not due until 1 July 2021.
The most significant risks that may result in LGIAsuper increasing the contribution rate, on the advice of the actuary, are: Investment risk - The risk that the scheme's investment returns will be lower than assumed and additional contributions are needed to fund the shortfall. Salary growth risk - The risk that wages or salaries will rise more rapidly than assumed, increasing vested benefits to be funded.
There are currently 62 entities contributing to the scheme and any changes in contribution rates would apply equally to all 62 entities. Cook Shire Council made less than 4% of the total contributions to the plan in the 2018-19 financial year.
2019 2018 Notes $'000 $'000
Superannuation contributions made to the Regional Defined Benefits Fund 1,201 1,061 - - Total super contributions paid by Council for employees 1,201 1,061
Contributions council expects to make to the Regional Defined Benefits Fund for 2019-20 1,200
page 35 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 21. Reconciliation of Net Result for the year to Net Cash Inflow/(Outflow) from Operating Activities
2019 2018 Notes $'000 $'000
Net Result (19,749) 11,176
Non-cash items: Depreciation 10,662 10,329 Unwinding of Discount Rates on Restoration Provisions 68 38 10,730 10,367
Investing and development activities: Net Losses/(Gains) on Disposal of Non-current Assets (5) (240) Loss on Write-Off of Assets - 16,895 Capital Grants and Contributions (4,852) (35,973) (4,857) (19,318)
Changes in operating assets and liabilities: (Increase)/Decrease in Receivables (427) (443) (Increase)/Decrease in Inventories 23 (67) Increase/(Decrease) in Payables and Accruals 1,912 (445) Increase/(Decrease) in Other Liabilities (966) (41) Increase/(Decrease) in Employee Leave Entitlements 152 2 Increase/(Decrease) in Provisions 11,693 1 12,387 (993)
Net cash inflow from Operating Activities (1,489) 1,232
page 36 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 22. Financial Instruments
Council Council has exposure to the following risks arising from financial instruments; (i) interest rate risk, (ii) credit risk, and (iii) liquidity risk.
This note provides information (both qualitative and quantitative) to assist statement users evaluate the significance of financial instruments on the Council's financial position and financial performance, including the nature and extent of risks and how the Council manages these exposures.
Financial Risk Management Council is responsible for the establishment and oversight of the risk management framework, together with developing and monitoring risk management policies.
Council's management approves policies for overall risk management, as well as specifically for managing credit, liquidity and market risk.
The Council's risk management policies are established to identify and analyse the risks faced, to set appropriate limits and controls and to monitor these risks and adherence against limits. The Council aims to manage volatility to minimise potential adverse effects on the financial performance of the Council.
The Council's audit committee (or other appropriate oversight body) oversees how management monitors compliance with the Council's risk management policies and procedures, and reviews the adequacy of the risk managements framework in relation to the risks faced by the Council. The Council audit committee (or other appropriate oversight body) is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee (or other appropriate oversight body).
Council does not enter into derivatives.
Credit Risk Exposure Credit risk is the risk of financial loss if a counterparty to a financial instrument fails to meet its contractual obligations. These obligations arise principally from the Council's investments and receivables from customers.
Exposure to credit risk is managed through regular analysis of credit counterparty ability to meet payment obligations. The carrying amount of financial assets represents the maximum credit exposure.
Investments in financial instruments are required to be made with Queensland Treasury Corporation (QTC) or similar State/Commonwealth bodies or financial institutions in Australia, in line with the requirements of the Statutory Bodies Financial Arrangements Act 1982 .
No collateral is held as security relating to the financial assets held by the Council.
The carrying amounts of financial assets at the end of the reporting period represent the maximum exposure to credit risk for the Council.
page 37 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 22. Financial Instruments (continued)
2019 2018 Notes $'000 $'000
The following table represents the maximum exposure to credit risk based on the carrying amounts of financial assets at the end of the reporting period:
Financial Assets Cash and Cash Equivalents 10 19,022 22,114 Receivables - Rates 11 1,720 1,479 Receivables - Other 11 645 483 Other Credit Exposures Guarantee 19 349 338 Total 21,736 24,414
Cash and Cash Equivalents The Council may be exposed to credit risk through its investments in the QTC Cash Fund and QTC Working Capital Facility. The QTC Cash Fund is an asset management portfolio that invests with a wide range of high credit rated counterparties. Deposits with the QTC Cash Fund are capital guaranteed. Working Capital Facility deposits have a duration of one day and all investments are required to have a minimum credit rating of "A-", therefore the likelihood of the counterparty having capacity to meet its financial commitments is strong.
Trade and Other Receivables In the case of rate receivables, the Council has the power to sell the property to recover any defaulted amounts. In effect this power protects the Council against credit risk in the case of defaults.
In other cases, the Council assesses the credit risk before providing goods or services and applies normal business credit protection procedures to minimise the risk.
page 38 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 22. Financial Instruments (continued)
2019 2018 Notes $'000 $'000
Liquidity Risk Liquidity risk refers to the situation where the Council may encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
The Council's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its labilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Council's reputation.
Council manages its exposure to liquidity risk by maintaining sufficient cash deposits and undrawn facilities, both short and long term, to cater for unexpected volatility in cash flows. These facilities are disclosed in Note 14.
The following lines of credit were available at the end of the reporting period: 2019 2018 $'000 $'000 Bank Overdraft Facility - QTC Working Capital Facility 5,000 10,000
The following table sets out the liquidity risk in relation to financial liabilities held by the Council. It represents the remaining contractual cashflows (principal and interest) of financial liabilities at the end of the reporting period, excluding the impact of netting agreements:
Total Contractual Carrying 0 to 1 year 1 to 5 years Over 5 years Cash Flows Amount $'000 $'000 $'000 $'000 $'000
2019 Trade and Other Payables 4,797 - - 4,797 4,797 Loans - QTC 690 2,760 2,496 5,946 4,668 Total 5,487 2,760 2,496 10,743 9,465 2018 Trade and Other Payables 3,261 - - 3,261 3,261 Loans - QTC 690 2,760 3,186 6,636 5,092 3,951 2,760 3,186 9,897 8,353
The outflows in the above table are not expected to occur significantly earlier and are not expected to be for significantly different amounts than indicated in the table. Market Risk Market risk is the risk that changes in market prices, such as interest rates, will affect the Council's income or the value of its holdings of financial instruments. Interest Rate Risk The Council is exposed to interest rate risk through investments and borrowings with Queensland Treasury. Fair Value QTC applies a book rate approach in the management of debt and interest rate risk, to limit the impact of market value movements to client's cost of funding. The book value represents the carrying value based on amortised cost using the effective interest method. page 39 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 23. National Competition Policy
Business activities to which the code of competitive conduct is applied
The Cook Shire Council applies the competitive code of conduct to the following activities: Aerodromes Water and Sewerage Waste Management
This requires the application of full cost pricing, identifying the cost of community service obligations (CSO) and eliminating the advantages and disadvantages of public ownership within that activity.
The CSO value is determined by Council, and represents an activity's cost(s) which would not be incurred if the primary objective of the activities was to make a profit. The Council provides funding from general revenue to the business activity to cover the cost of providing non-commercial community services or costs deemed to be CSO's by the Council.
The following activity statements are for activities subject to the competitive code of conduct:
Aerodromes Aerodromes Water and Waste Sewerage Mgt $'000 $'000 $'000 $'000
Revenue for services provided to external clients - 846,692 3,251,192 1,035,515 Less : Expenditure - (1,153,783) (5,181,924) (2,009,321) Surplus/(Deficit) - (307,091) (1,930,732) (973,806)
page 40 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 24. Transactions with Related Parties
2016 (a) Other Related Parties
Transactions with Other Related Parties Amount of Outstanding Terms and Provisions Doubtful transactions Balance (incl. Conditions for Doubtful Debts during year Commitments) Debts on Expense Details Outstanding Recognised 2019 $'000 $'000 $'000 $'000 Employee expenses of close family members of KMP ## 132 - Ordinary - - Total Related Party Transactions 132 - - -
2018 $'000 $'000 $'000 $'000 Employee expenses of close ## family members of KMP 44 - Ordinary - - Total Related Party Transactions 44 - - -
## The Finance Manager is a close family member of the Deputy Mayor. The Finance Manager was employed through an arms length process by Leading Roles and is compensated at a market salary.
The Council employs 141 staff of which only one is a close family member of a KMP.
(b) Key Management Personnel
Transactions with Key Management Personnel (KMP)
KMP include the Mayor, councillors, council's Chief Executive Officer and some executive management. The compensation paid to Key Management Personnel comprises:
2019 2018 $000 $000
Short-Term Employee Benefits 1,233 926 Post-Employment Benefits 87 59 Long-Term Benefits 18 9 Termination Benefits 68 105 Total KMP Transactions 1,406 1,099
page 41 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019
Note 24. Transactions with Related Parties (continued)
(c) Outstanding Balances
There are no outstanding balances at the end of the reporting period in relation to transacitons with related parties.
(d) Transactions with Related Parties that have not been disclosed
Most of the entities and persons that are related parties of council live and operate within the Cook Shire, therefore on a regular basis ordinary citizen transactions occur between the council and its related parties. Some examples include: - payment of rates - use of Cooktown swimming pool - animal registration - use of Library facilities
Council has not included these types of transactions in its disclosures where they are made on the same terms and conditions available to the general public.
page 42 Financial Statements 2019
Cook Shire Council
Notes to the Financial Statements for the year ended 30 June 2019 Note 25. Reserves
2019 2018 Notes $'000 $'000
The Reserves that have been transferred to Council's Cash, Cash Equivalents and Investment Restrictions are disclosed in Note 10.
Reserves held for funding future capital exp:
Refuse levy reserve 924 901 Land purchase reserve 455 455 Unspent loan cash reserve 1,300 1,300 Total Reserves held for Funding Future Capital Expenditure 2,679 2,656 TOTAL RESERVES 2,679 2,656
Refuse levy reserve Balance at Beginning of Financial Year 901 1,262 Transfer Retained Surplus Transfer - (819) from Retained Surplus 23 458 Balance at End of Financial Year 924 901
Land purchase reserve Balance at Beginning of Financial Year 455 455 Transfer from Retained Surplus - - Balance at End of Financial Year 455 455
Unspent loan cash reserve Balance at Beginning of Financial Year 1,300 1,300 Transfer from Retained Surplus - - Balance at End of Financial Year 1,300 1,300
Grant received in advance reserve Balance at Beginning of Financial Year - 4,699 Transfer to Retained Surplus - (4,699) Balance at End of Financial Year - -
page 43
To the Councillors of Cook Shire Council
Report on the audit of the financial report Opinion I have audited the accompanying financial report of Cook Shire Council (the council). In my opinion, the financial report: a) gives a true and fair view of the c as at 30 June 2019, and of its financial performance and cash flows for the year then ended b) complies with the Local Government Act 2009, the Local Government Regulation 2012 and Australian Accounting Standards. The financial report comprises the statement of financial position as at 30 June 2019, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes to the financial statements including significant accounting policies and other explanatory information, and the management certificate given by the Mayor and the Chief Executive Officer. Basis for opinion I conducted my audit in accordance with the Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the responsibilities for the audit of the financial report section of my report. I am independent of the council in accordance with the ethical requirements of the Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Australia. I have also fulfilled my other ethical responsibilities in accordance with the Code and the Auditor-General of Queensland Auditing Standards. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Other information Other information comprises the information included in Cook Shire Council annual report for the year ended 30 June 2019 report current year financial sustainability statement and long-term financial sustainability statement. My opinion on the financial report does not cover the other information and accordingly I do not express any form of assurance conclusion thereon. However, as required by the Local Government Regulation 2012, I have expressed a separate opinion on the current year financial sustainability statement.
In connection with my audit of the financial report, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report and my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this information, I am required to report that fact. I have nothing to report in this regard. Responsibilities of the council for the financial report The council is responsible for the preparation of the financial report that gives a true and fair view in accordance with the Local Government Act 2009, the Local Government Regulation 2012 and Australian Accounting Standards, and for such internal control as the council determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. The council is also responsible for assessing the council's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless it is intended to abolish the council or to otherwise cease operations of the council. inancial report My objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an l of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for expressing an opinion on the effectiveness of the council's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the council.
Conclude on the appropriateness of the c use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the council's ability to continue as a going concern. If I conclude that a material uncertainty exists, I
financial report or, if such disclosures are inadequate, to modify my opinion. I base my
However, future events or conditions may cause the council to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. I communicate with the council regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. Report on other legal and regulatory requirements In accordance with s.40 of the Auditor-General Act 2009, for the year ended 30 June 2019: a) I received all the information and explanations I required. b) In my opinion, the prescribed requirements in relation to the establishment and keeping of accounts were complied with in all material respects.
10 October 2019
Sri Narasimhan Queensland Audit Office as delegate of the Auditor-General Brisbane
Financial Statements 2019
Cook Shire Council
Current Year Financial Sustainability Statement for the year ended 30 June 2019
Actual Target 2019 2019
Measures of Financial Sustainability
Council's performance at 30 June 2019 against key financial ratios and targets.
Performance Indicators
1. Operating Surplus Ratio Net Result (excluding capital items) -50.44% 0 - 10% Total Operating Revenue (excluding capital items)
An indicator of which the extent to which revenues raised cover operational expenses only or are available for capital funding purposes or other purposes.
2. Asset Sustainability Ratio Capital Expenditure on the Replacement of Assets (renewals) more than 38.74% Depreciation Expense 90%
An approximation of the extent to which the infrastructure assets managed are being replaced as these reach the end of their useful lives.
3. Net Financial Liabilities Ratio Total Liabilities less Current Assets less than 8.49% Total Operating Revenue (excluding capital items) 60%
An indicator of the extent to which the net financial liabilities can be serviced by its operating revenue.
Note 1 - Basis of Preparation
The current year financial sustainability statement is a special purpose statement prepared in accordance with the requirements of the Local Government Regulation 2012 and the Financial Management (Sustainability) Guideline 2013 . The amounts used to calculate the three reported measures are prepared on an accrual basis and are drawn from the Council's audited general purpose financial statements for the year ended 30 June 2019.
page 47
To the Councillors of Cook Shire Council
Report on the current year financial sustainability statement Opinion I have audited the accompanying current year statement of financial sustainability of Cook Shire Council (the council) for the year ended 30 June 2019 comprising the statement, explanatory notes, and the certificate of accuracy given by the Mayor and the Chief Executive Officer. In accordance with section 212 of the Local Government Regulation 2012, in my opinion, in all material respects, the current year financial sustainability statement of Cook Shire Council for the year ended 30 June 2019 has been accurately calculated. Basis of opinion I conducted my audit in accordance with the Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing Standards. My responsibilities under those standards are further described in the responsibilities for the audit of the current year financial sustainability statement section of my report. I am independent of the council in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the statement in Australia. I have also fulfilled my other ethical responsibilities in accordance with the Code and the Auditor-General of Queensland Auditing Standards. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion. Emphasis of matter basis of accounting I draw attention to Note 1 which describes the basis of accounting. The current year financial sustainability statement has been prepared in accordance with the Financial Management (Sustainability) Guideline 2013 for the purpose of fulfilling the c responsibilities under the Local Government Regulation 2012. As a result, the statement may not be suitable for another purpose. My opinion is not modified in respect of this matter. Other Information Other information comprises the information included in Cook Shire Council report for the year ended 30 June 2019, but does not include the current year financial sustainability statement report the other information was the general purpose financial statements and the long-term financial sustainability statement. My opinion on the current year financial sustainability statement does not cover the other information and accordingly I do not express any form of assurance conclusion thereon. However, as required by the Local Government Regulation 2012, I have expressed a separate opinion on the general purpose financial report.
In connection with my audit of the financial report, my responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report and my knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work I have performed, I conclude that there is a material misstatement of this information, I am required to report that fact. I have nothing to report in this regard. Responsibilities of the council for the current year financial sustainability statement The council is responsible for the preparation and fair presentation of the current year financial sustainability statement in accordance with the Local Government Regulation 2012. The council s responsibility also includes such internal control as the council determines is necessary to enable the preparation and fair presentation of the statement that is accurately calculated and is free from material misstatement, whether due to fraud or error. udit of the current year financial sustainability statement My objectives are to obtain reasonable assurance about whether the current year financial sustainability statement as a whole is free from material misstatement, whether due to fraud my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this statement. My responsibility does not extend to forming an opinion on the appropriateness or relevance of the reported ratios, nor on the c As part of an audit in accordance with the Australian Auditing Standards, I exercise professional judgement and maintain professional scepticism throughout the audit. I also: Identify and assess the risks of material misstatement of the statement, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the council Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the council. Evaluate the overall presentation, structure and content of the statement, including the disclosures, and whether the statement represents the underlying transactions and events in a manner that achieves fair presentation.
I communicate with the council regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit.
10 October 2019
Sri Narasimhan Queensland Audit Office as delegate of the Auditor-General Brisbane
74.35% -79.27% page 51 page Financial Statements 2019 Statements Financial 2.2 -18.55% -20.22% Forecast 2.8 2.8 -21.95% -23.58% -25.28% 2.7 -16.84% -26.17% -30.10% 37%6.7 03%7.4 09%7.9 24%7.7 73.70% 73.07% 72.44% 71.79% 70.97% 71.64% 70.33% 68.87% 23.72% % .9 3.8 4.1 4.4 4.8 4.5 5.3 5.3 6.6 -71.22% -64.06% -57.83% -52.53% -48.15% -44.68% -42.14% -40.51% -39.38% 8.49% 3 0921 0022 0222 0422 0622 082029 2028 2027 2026 2025 2024 2023 2022 2021 2020 2019 2019 agtActual Target 90% > 60% < 0 5.4 3.8 -28.09% -30.98% -50.44% - 0 10% (renewals) - Council (excluding capital items) capital (excluding items) capital (excluding (excluding capital items) items) capital (excluding Cook Cook Shire Council Sustainability Financial Statement Long-Term Unaudited Measures Financial of Sustainability PerformanceIndicators prepared 30asJune at 2019 Council's30performanceJuneat 2019 againstkey financial ratiosand targets. Operating SurplusRatio 1. Anindicator ofwhich extent the towhich revenuesraised coveroperational expenses only areoravailable forcapital funding purposespurposes.other or AssetSustainability Ratio 2. Anapproximation theextent of whichto the infrastructure assetsmanaged arebeing replaced asthese reach the end oftheir useful lives. NetRatioFinancialLiabilities 3. Anindicator ofthe extent towhich the financial net liabilities becanserviced by operating its revenue. Net Result Net Operating Total Revenue Capital Assets Expenditureof theReplacement on ExpenseDepreciation CurrentAssets less Liabilities Total Operating Total Revenue